Company Quick10K Filing
Price302.05 EPS8
Shares39 P/E36
MCap11,778 P/FCF29
Net Debt250 EBIT417
TEV12,028 TEV/EBIT29
TTM 2019-05-31, in MM, except price, ratios
10-Q 2020-11-30 Filed 2021-01-06
10-K 2020-08-31 Filed 2020-10-29
10-Q 2020-05-31 Filed 2020-07-09
10-Q 2020-02-29 Filed 2020-04-09
10-Q 2019-11-30 Filed 2020-01-09
10-K 2019-08-31 Filed 2019-10-30
10-Q 2019-05-31 Filed 2019-07-10
10-Q 2019-02-28 Filed 2019-04-09
10-Q 2018-11-30 Filed 2019-01-09
10-K 2018-08-31 Filed 2018-10-30
10-Q 2018-05-31 Filed 2018-07-10
10-Q 2018-02-28 Filed 2018-04-09
10-Q 2017-11-30 Filed 2018-01-09
10-K 2017-08-31 Filed 2017-10-30
10-Q 2017-05-31 Filed 2017-07-10
10-Q 2017-02-28 Filed 2017-04-10
10-Q 2016-11-30 Filed 2017-01-09
10-K 2016-08-31 Filed 2016-10-31
10-Q 2016-05-31 Filed 2016-07-11
10-Q 2016-02-29 Filed 2016-04-11
10-Q 2015-11-30 Filed 2016-01-11
10-K 2015-08-31 Filed 2015-11-02
10-Q 2015-05-31 Filed 2015-07-10
10-Q 2015-02-28 Filed 2015-04-09
10-Q 2014-11-30 Filed 2015-01-09
10-K 2014-08-31 Filed 2014-10-30
10-Q 2014-05-31 Filed 2014-07-10
10-Q 2014-02-28 Filed 2014-04-09
10-Q 2013-11-30 Filed 2014-01-09
10-K 2013-08-31 Filed 2013-10-30
10-Q 2013-02-28 Filed 2013-04-09
10-Q 2012-11-30 Filed 2013-01-09
10-K 2012-08-31 Filed 2012-10-30
10-Q 2012-05-31 Filed 2012-07-10
10-Q 2012-02-29 Filed 2012-04-09
10-Q 2011-11-30 Filed 2012-01-09
10-K 2011-08-31 Filed 2011-10-31
10-Q 2011-05-31 Filed 2011-07-11
10-Q 2011-02-28 Filed 2011-04-06
10-Q 2010-11-30 Filed 2011-01-10
10-K 2010-08-31 Filed 2010-10-29
10-Q 2010-05-31 Filed 2010-07-09
10-Q 2010-02-28 Filed 2010-04-09
10-Q 2009-11-30 Filed 2010-01-08
8-K 2020-12-21 Earnings, Exhibits
8-K 2020-12-17 Shareholder Vote
8-K 2020-09-24
8-K 2020-09-21
8-K 2020-06-23
8-K 2020-06-07
8-K 2020-03-26
8-K 2020-02-29
8-K 2019-12-19
8-K 2019-12-19
8-K 2019-09-26
8-K 2019-07-11
8-K 2019-06-25
8-K 2019-05-28
8-K 2019-04-16
8-K 2019-03-29
8-K 2019-03-26
8-K 2019-02-08
8-K 2018-12-18
8-K 2018-12-18
8-K 2018-11-30
8-K 2018-09-25
8-K 2018-08-31
8-K 2018-07-27
8-K 2018-07-05
8-K 2018-06-26
8-K 2018-05-08
8-K 2018-04-17
8-K 2018-03-27
8-K 2017-12-31

FDS 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 fds-20201130xexx3112.htm
EX-31.2 fds-20201130xexx3122.htm
EX-32.1 fds-20201130xexx3212.htm
EX-32.2 fds-20201130xexx3222.htm

FactSet Earnings 2020-11-30

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin


Washington, D.C. 20549
Form 10-Q
For the quarterly period ended November 30, 2020
For the transition period from ______to ______

Commission File Number: 1-11869
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
(I.R.S. Employer
Identification No.)

45 Glover Avenue, Norwalk, Connecticut
(Address of principal executive office)(Zip Code)
Registrant’s telephone number, including area code: (203) 810-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbols(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueFDSNew York Stock Exchange LLC
The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 and post such files). Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x   Accelerated filer ☐   Non-accelerated filer ☐   Smaller reporting company    Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No x
The number of shares outstanding of the registrant’s common stock, $.01 par value, as of December 31, 2020 was 37,978,624.

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FactSet Research Systems Inc.
Form 10-Q
For the Quarter Ended November 30, 2020
Consolidated Statements of Comprehensive Income for the three months ended November 30, 2020 and 2019
Consolidated Balance Sheets at November 30, 2020 and August 31, 2020
For additional information about FactSet Research Systems Inc. and access to its Annual Reports to Stockholders and Securities and Exchange Commission filings, free of charge, please visit FactSet’s website ( Any information on or linked from the website is not incorporated by reference into this Quarterly Report on Form 10-Q.


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Special Note Regarding Forward-Looking Statements
FactSet Research Systems Inc. has made statements under the captions Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1A. Risk Factors, and in other sections of this Quarterly Report on Form 10-Q for the quarter ended November 30, 2020, that are forward-looking statements. In some cases, you can identify these statements by words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "intends," "projects," "indicates," "predicts," "potential," or "continue," and similar expressions.
These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance and anticipated trends in our business. These statements are only predictions based on our current expectations, estimates, forecasts and projections about future events. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. There are many important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including the numerous factors discussed under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended August 31, 2020, that should be specifically considered.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Forward-looking statements speak only as of the date they are made, and actual results could differ materially from those anticipated in forward-looking statements. We have no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, revised expectations, future events or risks, except to the extent required by applicable securities laws.
We intend that all forward-looking statements we make will be subject to safe harbor protection of the federal securities laws as found in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.


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FactSet Research Systems Inc.
Three Months Ended
November 30,
(In thousands, except per share data)
Revenue$388,206 $366,658 
Operating expenses
Cost of services188,088 164,957 
Selling, general and administrative79,087 88,515 
Total operating expenses267,175 253,472 
Operating income121,031 113,186 
Other expenses
Interest expense, net(1,029)(3,131)
Other income (expense), net230 (1,314)
Income before income taxes120,232 108,741 
Provision for income taxes19,026 14,784 
Net income$101,206 $93,957 
Basic earnings per common share$2.66 $2.47 
Diluted earnings per common share$2.62 $2.43 
Basic weighted average common shares38,007 37,978 
Diluted weighted average common shares38,697 38,587 
The accompanying notes are an integral part of these Consolidated Financial Statements.


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FactSet Research Systems Inc.
Three Months Ended
November 30,
(In thousands)
Net income
$101,206 $93,957 
Other comprehensive income, net of tax:
Net unrealized (loss) gain on cash flow hedges*(116)2,051 
Foreign currency translation adjustments
333 7,787 
Other comprehensive gain217 9,838 
Comprehensive income
$101,423 $103,795 
*For the three months ended November 30, 2020, the net unrealized loss on cash flow hedges were net of a tax benefit of $39 thousand. For the three months ended November 30, 2019, the net unrealized gain on cash flow hedges were net of a tax expense of $714 thousand.
The accompanying notes are an integral part of these Consolidated Financial Statements.


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FactSet Research Systems Inc.
(In thousands, except share data)
November 30, 2020August 31, 2020
Cash and cash equivalents
$560,137 $585,605 
18,166 19,572 
Accounts receivable, net of reserves of $7,252 at November 30, 2020 and $7,987 at August 31, 2020
156,218 155,011 
Prepaid taxes
25,908 38,067 
Prepaid expenses and other current assets
43,660 43,675 
Total current assets
804,089 841,930 
Property, equipment and leasehold improvements, net
135,121 133,102 
738,575 709,703 
Intangible assets, net
134,896 121,095 
Lease right-of-use assets, net257,591 248,929 
Other assets
29,154 28,629 
TOTAL ASSETS$2,099,426 $2,083,388 
Accounts payable and accrued expenses
$84,738 $82,094 
Current lease liabilities30,954 29,056 
Accrued compensation
36,486 81,873 
Deferred fees
46,439 53,987 
Dividends payable
29,266 29,283 
Total current liabilities
227,883 276,293 
Long-term debt
575,511 574,354 
Deferred taxes
18,444 19,713 
Deferred fees
9,147 9,319 
Taxes payable
28,795 27,739 
Long-term lease liabilities279,723 272,269 
Other non-current liabilities7,350 7,326 
$1,146,853 $1,187,013 
Commitments and Contingencies

Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued
$ $ 
Common stock, $0.01 par value, 150,000,000 shares authorized, 40,884,113 and 40,767,708 shares issued, 38,008,129 and 38,030,252 shares outstanding at November 30, 2020 and August 31, 2020, respectively
409 408 
Additional paid-in capital
968,375 939,067 
Treasury stock, at cost: 2,875,984 and 2,737,456 shares at November 30, 2020 and August 31, 2020, respectively
Retained earnings
705,089 633,149 
Accumulated other comprehensive loss
The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.
Three Months Ended
November 30,
(in thousands)20202019
Net income$101,206 $93,957 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization15,290 14,390 
Amortization of lease right-of-use assets10,697 10,700 
Stock-based compensation expense11,317 9,814 
Deferred income taxes437 (6,624)
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable, net of reserves(342)875 
Accounts payable and accrued expenses2,240 13,165 
Accrued compensation(45,858)(45,780)
Deferred fees(9,724)(6,483)
Taxes payable, net of prepaid taxes13,302 16,616 
Lease liabilities, net(10,007)(3,761)
Other, net718 (1,078)
Net cash provided by operating activities89,276 95,791 
Acquisition of business, net of cash and cash equivalents acquired(41,916) 
Purchases of property, equipment, leasehold improvements and internal-use software(18,333)(26,780)
Purchases of investments(250)(2,620)
Proceeds from maturity or sale of investments2,177 2,257 
     Net cash used in investing activities(58,322)(27,143)
Repurchases of common stock(43,144)(84,423)
Dividend payments(29,103)(27,259)
Proceeds from employee stock plans17,993 16,727 
Other financing activities(2,123) 
     Net cash used by financing activities(56,377)(94,955)
Effect of exchange rate changes on cash and cash equivalents(45)2,725 
Net decrease in cash and cash equivalents(25,468)(23,582)
Cash and cash equivalents at beginning of period585,605 359,799 
Cash and cash equivalents at end of period$560,137 $336,217 
The accompanying notes are an integral part of these Consolidated Financial Statements.


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FactSet Research Systems Inc.
For the Three Months Ended November 30, 2020
(in thousands, except share data)Common StockAdditional
Treasury StockRetained
SharesPar ValueSharesAmount
Balance as of August 31, 202040,767,708 $408 $939,067 2,737,456 $(636,956)$633,149 $(39,293)$896,375 
Net income101,206 101,206 
Other comprehensive loss217 217 
Common stock issued for employee stock plans98,459 1 17,991 17,992 
Vesting of restricted stock17,946 — 6,728 (2,124)(2,124)
Repurchases of common stock131,800 (43,144)(43,144)
Stock-based compensation expense11,317 11,317 
Dividends declared(29,266)(29,266)
Balance as of November 30, 202040,884,113 $409 $968,375 2,875,984 $(682,224)$705,089 $(39,076)$952,573 

For the Three Months Ended November 30, 2019
(in thousands, except share data)Common StockAdditional
Treasury Stock
Shares Amount
SharesPar ValueSharesAmount
Balance as of August 31, 201940,104,192 $401 $806,973 1,986,352 $(433,799)$373,225 $(74,544)$672,256 
Net income93,957 93,957 
Other comprehensive income9,838 9,838 
Common stock issued for employee stock plans119,740 1 19,181 19,182 
Vesting of restricted stock15,376 — 5,778 (1,456)(1,456)
Repurchases of common stock343,000 (84,423)(84,423)
Stock-based compensation expense9,814 9,814 
Dividends declared(27,290)(27,290)
Balance as of November 30, 201940,239,308 $402 $835,968 2,335,130 $(519,678)$439,892 $(64,706)$691,878 

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


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FactSet Research Systems Inc.
November 30, 2020

Note 1Description of Business
Note 2Basis of Presentation
Note 3Recent Accounting Pronouncements
Note 4Revenue Recognition
Note 5Fair Value Measures
Note 6Derivative Instruments
Note 7Acquisition
Note 8Goodwill
Note 9Income Taxes
Note 10Leases
Note 11Debt
Note 12Commitments and Contingencies
Note 13Stockholders' Equity
Note 14Earnings Per Share
Note 15Stock-Based Compensation
Note 16Segment Information

FactSet Research Systems Inc. and its wholly-owned subsidiaries (collectively, the "Company" or "FactSet") is a global provider of integrated financial information, analytical applications and industry-leading services for the investment and corporate communities. 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. FactSet's goal is to provide a seamless user experience spanning idea generation, research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting, in which the Company serves the front, middle, and back offices to drive productivity and improved performance. FactSet's flexible, open data and technology solutions can be implemented both across the investment portfolio lifecycle or as standalone components serving different workflows in an organization. FactSet is focused on growing the business through three segments: the Americas, EMEA (Europe and Africa), and Asia Pacific. Within each of the segments, the Company primarily delivers insight and information through the four workflow solutions of Research, Analytics and Trading, Content and Technology Solutions ("CTS") and Wealth.
FactSet currently serves a wide range of financial professionals, including but not limited to portfolio managers, investment research professionals, investment bankers, risk and performance analysts, wealth advisors and corporate clients. FactSet provides both insights on global market trends and intelligence on companies and industries, as well as capabilities to monitor portfolio risk and performance and execute trades. The Company combines dedicated client service with open and flexible technology offerings, such as a configurable desktop and mobile platform, comprehensive data feeds, open marketplace and digital portals and application programming interface ("APIs"). The Company’s revenue is primarily derived from subscriptions to products and services such as workstations, portfolio analytics, enterprise data, and research management.
FactSet conducts business globally and is managed on a geographic basis. The accompanying unaudited Consolidated Financial Statements and Notes to the Company's Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all

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information and footnotes required by GAAP for annual financial statements. The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany activity and balances have been eliminated.
In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly the Company’s results of operations, financial position, cash flows and equity. Certain notes and other information have been condensed or omitted in this Quarterly Report on Form 10-Q, therefore the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020.
The Company has evaluated subsequent events through the date the financial statements were issued.
The Company reclassified in the Consolidated Statement of Cash Flows certain prior year comparative figures from Other, net to Amortization of lease right-of-use assets and Lease liabilities, net within Net cash provided by operating activities to conform to the current year's presentation.

A novel strain of coronavirus, now known as COVID-19 ("COVID-19"), was first reported in December 2019, and it has since extensively impacted the global health and economic environment, with the World Health Organization characterizing COVID-19 as a pandemic on March 11, 2020. FactSet is closely monitoring pandemic-related developments and has taken, and continues to take, numerous steps to address them. FactSet has required nearly all its employees to work remotely on a temporary basis and has implemented global travel restrictions for employees. The transition to remote working has not significantly affected financial results for the three months ended November 30, 2020. Since the situation surrounding the COVID-19 pandemic remains fluid, FactSet is actively managing its response and has assessed potential impacts to its financial position and operating results for the three months ended November 30, 2020. The extent of the effect on the Company’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, and governmental, regulatory and private sector responses, all of which are uncertain and difficult to predict.
As of November 30, 2020, the Company implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect. There were no new standards or updates adopted during the three months ended November 30, 2020 that had a material impact on the Consolidated Financial Statements.
New Accounting Standards or Updates Recently Adopted 
Goodwill Impairment Test
In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350); Simplifying the Test for Goodwill Impairment, which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company has adopted this standard effective September 1, 2020. The adoption of this accounting standard update had no impact on the Company's Consolidated Financial Statements.
Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU 2016-03, Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces the "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost. Subsequent to the adoption, the allowance for doubtful accounts is made when the financial asset is first recorded to the balance sheet (and periodically thereafter) and is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The Company has adopted this standard effective September 1, 2020. The adoption of this accounting standard update did not have a material impact on the Company's Consolidated Financial Statements.

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Recent Accounting Standards or Updates Not Yet Effective
Facilitation of the Effects of Reference Rate Reform on Financial Reporting
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting, to provide optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR. As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued. The guidance is designed to simplify how entities account for contracts, such as receivables, debt, leases, derivative instruments and hedging, that are modified to replace LIBOR or other benchmark interest rates with new rates. The guidance is effective upon issuance and may be applied through December 31, 2022. The Company is currently evaluating the impact of this accounting standard, but it is not expected to have a material impact on the Company’s Consolidated Financial Statements.
Income Tax Simplification
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes, to simplify various aspects related to accounting for income taxes, eliminating certain exceptions to the general principles in accounting for income taxes related to intraperiod tax allocation, simplifying when companies recognize deferred taxes in an interim period, and clarifying certain aspects of the current guidance to promote consistent application. The guidance will be effective for the Company in the first quarter of fiscal 2022, with early adoption permitted. Most amendments are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently evaluating the potential impact of adopting the guidance on its Consolidated Financial Statements.
No other new accounting pronouncements issued or effective as of November 30, 2020, have had or are expected to have a material impact on the Company’s Consolidated Financial Statements.
The Company derives most of its revenue by providing client access to its hosted proprietary data and analytics platform which can include various combinations of products and services available over the contractual term. The hosted platform is a subscription-based service that consists primarily of providing access to products and services including workstations, portfolio analytics, enterprise data, and research management. The Company determined that the subscription-based service represents a single performance obligation covering a series of distinct products and services that are substantially the same and that have the same pattern of transfer to the client. The Company also determined the nature of the promise to the client is to provide daily access to one overall data and analytics platform. This platform provides integrated financial information, analytical applications and industry-leading service for the investment community. Based on the nature of the services and products offered by FactSet, the Company applies an input time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. The Company records revenue for its contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied. FactSet does not consider payment terms as a performance obligation for clients with contractual terms that are one year or less and the Company has elected the practical expedient.
Contracts with clients can include certain fulfillment costs, comprised of up-front costs to allow for the delivery of services and products, which are recoverable. In connection with the adoption of the revenue recognition standard, fulfillment costs are recognized as an asset, recorded in the Prepaid expenses and other current assets account for the current portion and Other assets for the non-current portion, based on the term of the license period, and amortized consistent with the associated revenue for providing the services. There are no significant judgments that would impact the timing of revenue recognition. The majority of client contracts have a duration of one year or less, or the amount FactSet is entitled to receive corresponds directly with the value of performance obligations completed to date, and therefore, the Company does not disclose the value of the remaining unsatisfied performance obligations. 
Disaggregated Revenue 
The Company disaggregates revenue from contracts with clients by geographic region, which includes the Americas, EMEA and Asia Pacific. FactSet believes these regions are reflective of how the Company manages the business and the markets in which it serves. These regions best depict the nature, amount, timing and uncertainty of revenue and cash flows related to contracts with clients. Refer to Note 16, Segment Information, for further information on revenue by geographic region. 

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The following table presents this disaggregation of revenue by geography:
Three Months Ended November 30,
(in thousands)
Americas$244,337 $231,330 
105,777 100,830 
Asia Pacific38,092 34,498 
Total Revenue
$388,206 $366,658 

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income and cost approaches are permissible. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. 
Fair Value Hierarchy 
The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. FactSet has categorized its cash equivalents, investments and derivatives within the fair value hierarchy as follows: 
Level 1 – applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. These Level 1 assets and liabilities include the Company’s corporate money market funds that are classified as cash equivalents. 
Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. The Company’s certificates of deposit, mutual funds and derivative instruments are classified as Level 2. 
Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. There were no Level 3 assets or liabilities held by the Company as of November 30, 2020 or August 31, 2020.

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(a) Assets and Liabilities Measured at Fair Value on a Recurring Basis 
The following tables show, by level within the fair value hierarchy, the Company’s assets and liabilities that are measured at fair value on a recurring basis at November 30, 2020 and August 31, 2020. The Company did not have any transfers between levels of fair value measurements during the periods presented. 
Fair Value Measurements at November 30, 2020
(in thousands)
Level 1
Level 2
Level 3
Corporate money market funds (1)
$201,803 $ $ $201,803 
Mutual funds (2)
 18,166  18,166 
Certificates of deposit (3)
Derivative instruments (4)
 3,027  3,027 
Total assets measured at fair value$201,803 $21,193 $ $222,996 
Derivative instruments (4)
$ $5,311 $ $5,311 
Total liabilities measured at fair value$ $5,311 $ $5,311 

Fair Value Measurements at August 31, 2020
(in thousands)
Level 1
Level 2
Level 3
Corporate money market funds (1)
$276,852 $ $ $276,852 
Mutual funds (2)
 17,257  17,257 
Certificates of deposit (3)
 2,315  2,315 
Derivative instruments (4)
 3,644  3,644 
Total assets measured at fair value$276,852 $23,216 $ $300,068 
Derivative instruments (4)
$ $5,773 $ $5,773 
Total liabilities measured at fair value$ $5,773 $ $5,773 

1.The Company’s corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. As such, the Company’s corporate money market funds are classified as Level 1 assets and included in Cash and cash equivalents within the Consolidated Balance Sheets.
2.The Company’s mutual funds have a fair value based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. As such, the Company’s mutual funds are classified as Level 2 and are classified as Investments (short-term) on the Consolidated Balance Sheets.
3.The Company’s certificates of deposit held for investment are not debt securities and are classified as Level 2 assets. These certificates of deposit have original maturities greater than three months but less than one year and, as such, are classified as Investments (short-term) within the Consolidated Balance Sheets.
4.The Company utilizes the income approach to measure fair value for its foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads, and are classified as Level 2 assets. To estimate fair value for the interest rate swap agreement, the Company utilizes a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. Refer to Note 6, Derivative Instruments, for more information on the Company's derivative instruments designed as cash flow hedges.

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(b) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, operating lease assets, goodwill and intangible assets, and investments. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections. The Company reviews goodwill and intangible assets for impairment annually, during the fourth quarter of each fiscal year, or as circumstances indicate the possibility for impairment. The Company monitors the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. During the three months ended November 30, 2020, no fair value adjustments or material fair value measurements were required for the Company’s non-financial assets or liabilities.
(c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only 
As of November 30, 2020, and August 31, 2020, the fair value of the Company’s 2019 Revolving Credit Facility (as defined below in Note 11, Debt), included in Long-term debt within the Consolidated Balance Sheets, was $575.0 million, which approximated its carrying amount given the application of a floating interest rate equal to LIBOR plus a spread using a debt leverage pricing grid. As the interest rate is a variable rate, adjusted based on market conditions, it approximates the current market-rate for similar instruments available to companies with comparable credit quality and maturity, and therefore, the long-term debt is categorized as Level 2 in the fair value hierarchy.
As part of the Truvalue Labs, Inc. ("TVL") acquisition, FactSet assumed an additional $1.1 million in debt included in Long-term debt within the Consolidated Balance Sheets. Refer to Note 7, Acquisition for further discussion on the TVL acquisition.
Cash Flow Hedges 
Foreign Currency Forward Contracts
FactSet conducts business outside the U.S. in several currencies including the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso. As such, the Company is exposed to movements in foreign currency exchange rates compared to the U.S. dollar. The Company utilizes derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and limits counterparties to credit-worthy financial institutions. Refer to Note 12, Commitments and Contingencies – Concentrations of Credit Risk, for further discussion on counterparty credit risk. 
In designing a specific hedging approach, FactSet considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. The changes in fair value for these foreign currency forward contracts are initially reported as a component of Accumulated other comprehensive loss ("AOCL") and subsequently reclassified into Operating expenses when the hedge is settled. There was no discontinuance of cash flow hedges during the first three months of fiscal 2021 or 2020, and as such, no corresponding gains or losses related to changes in the value of the Company’s contracts were reclassified into earnings prior to settlement. 
As of November 30, 2020, FactSet maintained foreign currency forward contracts to hedge a portion of its British Pound Sterling, Euro, Indian Rupee and Philippine Peso exposures. FactSet entered into a series of forward contracts to mitigate its currency exposure ranging from 25% to 75% over their respective hedged periods. The current foreign currency forward contracts are set to mature at various points between the second quarter of fiscal 2021 through the first quarter of fiscal 2022.
As of November 30, 2020, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S. dollars was ₱1.3 billion and Rs2.4 billion, respectively. The gross notional value of foreign currency forward contracts to purchase U.S. dollars with Euros and British Pound Sterling was €36.3 million and £37.6 million, respectively.

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Interest Rate Swap Agreement
On March 5, 2020, FactSet entered into an interest rate swap agreement with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of its outstanding debt under its 2019 Revolving Credit Facility (as defined below in Note 11, Debt). As of November 30, 2020, FactSet has borrowed $575.0 million of the available $750.0 million under the 2019 Revolving Credit Facility, which bears interest on the outstanding principal amount at a rate equal to contractual one month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of November 30, 2020. Refer to Note 11, Debt, for further discussion on the 2019 Revolving Credit Facility. The variable interest rate on FactSet’s long-term debt can expose the Company to interest rate volatility arising from changes in LIBOR. Under the terms of the interest rate swap agreement, FactSet will pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The interest rate swap agreement matures on March 29, 2024.
As the terms for the interest rate swap agreement align with the 2019 Revolving Credit Facility, the Company does not expect any hedge ineffectiveness. The Company has designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets. Realized gains or losses are subsequently reclassified into Other expenses in the Consolidated Statement of Income when settled.
The following is a summary of the gross notional values of the derivative instruments: 

(in thousands, in U.S. dollars)
Gross Notional Value
November 30, 2020August 31, 2020
Foreign currency forward contracts$150,298 $129,649 
Interest rate swap agreement287,500 287,500 
Total cash flow hedges$437,798 $417,149 

Fair Value of Derivative Instruments
The following is a summary of the fair values of the derivative instruments:
Fair Value of Derivative Instruments
Derivatives designated as hedging instrumentsDerivative AssetsDerivative Liabilities
Balance Sheet ClassificationNovember 30, 2020August 31, 2020Balance Sheet ClassificationNovember 30, 2020August 31, 2020
Foreign currency forward contractsPrepaid expenses and other current assets$3,027 $3,644 Accounts payable and accrued expenses$45 $93 
Interest rate swap agreementPrepaid expenses and other current assets  Accounts payable and accrued expenses1,447 1,861 
Other Assets  Other non-current liabilities3,819 3,819 
Total cash flow hedges$3,027 $3,644 $5,311 $5,773 

All derivatives were designated as hedging instruments as of November 30, 2020 and August 31, 2020.

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Derivatives in Cash Flow Hedging Relationships
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for each of the three months ended November 30, 2020 and 2019, respectively:

(in thousands)Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
November 30,November 30,
Derivatives in Cash Flow Hedging Relationships2020201920202019
Foreign currency forward contracts$248 $2,030 SG&A$817 $(734)
Interest rate swap agreement(56) Interest expense, net(470) 
Total cash flow hedges$192 $2,030 $347 $(734)
Foreign currency forward contract gains and losses are recorded in the Consolidated Statement of Income in Selling, general, and administrative ("SG&A"). The gain or loss from the interest rate swap agreement is recorded in the Consolidated Statement of Income in Interest expense, net.
As of November 30, 2020, the Company estimates that net pre-tax derivative gains of $1.1 million included in AOCL will be reclassified into earnings within the next 12 months. As of November 30, 2020, FactSet's cash flow hedges were effective, with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Offsetting of Derivative Instruments
FactSet’s master netting and other similar arrangements with its respective counterparties allow for net settlement under certain conditions. As of November 30, 2020, and August 31, 2020, there were no material amounts recorded net on the Consolidated Balance Sheets.
Truvalue Labs, Inc.
On November 2, 2020, FactSet acquired all of the outstanding shares of TVL for a purchase price of $41.9 million, subject to working capital and other adjustments. TVL is a leading provider of environmental, social, and governance ("ESG") information derived from artificial intelligence. The acquisition of TVL further enhances FactSet's commitment to providing industry leading access to ESG data across its platforms. The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. FactSet expects to finalize the allocation of the purchase price for TVL as soon as possible, but in any event, no later than one year from the acquisition date.


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The preliminary estimated acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
Estimated Acquisition Date Fair ValueEstimated Acquisition Date Useful LifeAmortization Method
(in thousands)(in years)
Current assets$811 
Amortizable intangible assets
Software technology10,700 13 yearsStraight-line
Client relationships900 12 yearsStraight-line
Trade names2,800 15 yearsStraight-line
Other non-current assets5,299 
Current liabilities(3,184)
Other non-current liabilities(4,753)
Total purchase price$41,915 
Goodwill totaling $29.3 million represents the excess of the TVL purchase price over the fair value of net assets acquired and is included in the Americas segment. Goodwill generated from the TVL acquisition is not deductible for income tax purposes. The results of operations of TVL have been included in the Company’s Consolidated Financial Statements, within the Americas segment, since the completion of the acquisition on November 2, 2020. Pro forma information has not been presented because the effect of the TVL acquisition is not material to the Company’s Consolidated Financial Statements.
Changes in the carrying amount of goodwill by segment for the three months ended November 30, 2020 are as follows: 
(in thousands)
Asia Pacific
Balance at August 31, 2020$386,195 $320,427 $3,081 $709,703 
  Acquisitions29,342   29,342 
Foreign currency translations (519)49 (470)
Balance at November 30, 2020$415,537 $319,908 $3,130 $738,575 
Goodwill is not amortized as it is estimated to have an indefinite life. At least annually, the Company is required to test goodwill at the reporting unit level for potential impairment, and, if impaired, write down to fair value based on the present value of discounted cash flows. The Company’s reporting units evaluated for potential impairment were the Americas, EMEA and Asia Pacific, which reflect the level of internal reporting the Company uses to manage its business and operations. The three reporting units are consistent with the reported operating segments as there is no discrete financial information available for the subsidiaries within each operating segment. The Company performed its annual goodwill impairment test during the fourth quarter of fiscal 2020, consistent with the timing of previous years, utilizing a qualitative analysis, and concluded it was more likely than not the fair value of each reporting unit was greater than its respective carrying value and no impairment charge was required.

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Income tax expense is based on taxable income determined in accordance with current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates.
Provision for Income Taxes
The provision for income taxes is as follows:
Three Months Ended November 30,
(in thousands)20202019
Income before income taxes$120,232 $108,741 
Provision for income taxes$19,026 $14,784 
Effective tax rate15.8 %13.6 %
FactSet’s effective tax rate is based on recurring factors and nonrecurring events, including the taxation of foreign income. The Company’s effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other nonrecurring events that may not be predictable. FactSet’s effective tax rate is lower than the applicable U.S. corporate income tax rate for the three months ended November 30, 2020 driven mainly by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction. The effective tax rate for the three months ended November 30, 2020 is further reduced by windfall tax benefits from stock-based compensation.
For the three months ended November 30, 2020, the provision for income taxes was $19.0 million, compared to $14.8 million from the same period a year ago. The provision increased due to higher operating income and a reduction in income tax benefits for the three months ended November 30, 2020, compared to the same period a year ago. The income tax benefit for the three months ended November 30, 2020 was $3.0 million related to windfall tax benefits from stock-based compensation compared to $5.9 million for the three months ended November 30, 2019 related to the remeasurement of a foreign net deferred tax position due to changes in the jurisdiction's tax rate, finalizing prior years' tax returns, and windfall tax benefits from stock-based compensation.
FactSet primarily leases real estate for office space under various operating lease agreements. FactSet reviews new arrangements at inception to evaluate whether the Company obtains substantially all the economic benefits of and has the right to control the use of an asset. If FactSet determines that an arrangement qualifies as a lease, a lease liability and a corresponding lease right-of-use ("ROU") asset are recognized on the lease commencement date. As of November 30, 2020, the Company’s leases have remaining terms of less than one year to just over 15 years.
In determining the amount of lease payments used in measuring each lease ROU asset and lease liability, FactSet elected the package of practical expedients permitted under the transition guidance, which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification, and initial direct costs. FactSet did not elect the use-of-hindsight practical expedient in determining the lease term and in assessing impairment. FactSet elected the practical expedient not to separate lease components from non-lease components but, rather, to combine them into one single lease component, which FactSet recognizes over the expected lease term on a straight-line expense basis in occupancy costs (a component of SG&A expense). The Company has also elected to apply the short-term lease exception to not recognize lease ROU assets and lease liabilities for leases with a term of 12 months or less. FactSet will recognize these lease payments on a straight-line basis over the lease term in Occupancy costs (a component of SG&A expense).
The adoption of the lease standard primarily related to the Company’s real estate operating leases. As of November 30, 2020, the Company recognized $257.6 million of Lease right-of-use assets, net (initially measured as the lease liabilities, adjusted for deferred rent and lease incentives) and combined Current and Long-term lease liabilities of $310.7 million in the Consolidated Balance Sheet. The lease ROU assets and lease liabilities recognized did not include any renewal or termination options that were not yet reasonably certain to be exercised.
Lease liabilities are measured as the present value of the future minimum lease payments, which includes fixed lease payments and certain qualifying index-based variable payments, over the lease term. The present value is calculated using FactSet’s incremental borrowing rate ("IBR") within the geography where the leased asset is located as there is no rate implicit in the

Company’s operating lease arrangements. As FactSet does not have any outstanding public debt, the Company estimates the IBR based on FactSet’s estimated credit rating and available market information. The IBR is determined at lease commencement, or as of September 1, 2019 for operating leases in existence upon adoption of ASC 842. The IBR is subsequently reassessed upon any modification to the lease arrangement.
The following table reconciles FactSet’s future undiscounted cash flows related to the Company’s operating leases and the reconciliation to the Current and Long-term lease liabilities as of November 30, 2020:
(in thousands)
Minimum Lease
Fiscal Years Ended August 31,
2021 (remaining nine months)$32,134 
Total $382,826 
Less: Imputed interest72,149 
Present value $310,677 
The components of lease cost related to the operating leases were as follows:
Three Months Ended November 30,
(in millions)
Operating lease cost1
$10.7 $10.6 
Variable lease cost2
$3.4 $5.0 
1.Operating lease costs include fixed lease payments and qualifying index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by FactSet.
2.Variable lease costs were not included in the measurement of the lease liabilities and are primarily related to variable non-lease costs and leases that qualified for the short-term lease exception. These variable non-lease costs included costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These cost relate to utilities, real estate taxes, insurance and maintenance.
The following table summarizes the Company's lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets:
November 30, 2020August 31, 2020
Weighted average remaining lease term (in years)
Weighted average discount rate (IBR)
4.3 %4.2 %

The following table summarizes supplemental cash flow information related to the Company's operating leases:
Three Months Ended November 30,
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities$9.7 $10.5 
Lease ROU assets obtained in exchange for lease liabilities$1.1 $2.1 


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11. DEBT
FactSet’s debt obligations at November 30, 2020 and August 31, 2020 consisted of the following:
(in thousands)November 30, 2020August 31, 2020
2019 Revolving Credit Facility$575,000 $575,000 
2019 Revolving Credit Facility loan origination fees(600)(646)
Other Long-term debt1
Long-term debt$575,511 $574,354 
1This debt was acquired as part of the TVL acquisition, refer to Note 7, Acquisition, for more information on the acquisition.
On March 29, 2019, the Company entered into a credit agreement between FactSet, as the borrower, and PNC Bank, National Association ("PNC"), as the administrative agent and lender (the "2019 Credit Agreement"). The 2019 Credit Agreement provides for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility"). FactSet may request borrowings under the 2019 Revolving Credit Facility until its maturity date of March 29, 2024. The 2019 Credit Agreement also allows FactSet, subject to certain requirements, to arrange for additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million.
FactSet borrowed $575.0 million of the available $750.0 million provided by the 2019 Revolving Credit Facility, resulting in $175.0 million available to be withdrawn. FactSet is required to pay a commitment fee using a pricing grid currently at 0.10% based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeds the borrowed amount. All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheets at November 30, 2020. The principal balance is payable in full on the maturity date.
The fair value of the Company's long-term debt under the 2019 Revolving Credit Facility was $575.0 million as of November 30, 2020, which the Company believes approximates the carrying amount as the terms and interest rates approximate market rates given its floating interest rate basis. Borrowings under the 2019 Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid, currently at 0.875%. For the three months ended November 30, 2020 and 2019, FactSet recorded interest expense on its outstanding debt, including the amortization of debt issuance costs of $2.1 million and $4.2 million, respectively, net of the effects of the interest rate swap agreement. Including the effects of the interest rate swap agreement, the year-to-date weighted average interest rate on amounts outstanding under the Company's 2019 Revolving Credit Facility was 1.40% and 2.20% as of November 30, 2020 and August 31, 2020, respectively. Refer to Note 6, Derivative Instruments for further discussion on the interest rate swap agreement. Interest on the loan outstanding under the 2019 Revolving Credit Facility is payable quarterly, in arrears, and on the maturity date.
During fiscal 2019, FactSet incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement. These costs were capitalized as loan origination fees and are amortized into interest expense ratably over the term of the 2019 Credit Agreement.
The 2019 Credit Agreement contains covenants and requirements restricting certain FactSet activities, which are usual and customary for this type of loan. In addition, the 2019 Credit Agreement requires that FactSet maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA below a specified level as of the end of each fiscal quarter. The Company was in compliance with all the covenants and requirements within the 2019 Credit Agreement as of November 30, 2020.

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Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the balance sheet as liabilities. FactSet records liabilities for commitments when incurred (i.e., when the goods or services are received).
Purchase Commitments with Suppliers and Vendors
Purchase obligations represent payments due in future periods in respect of commitments to the Company’s various data vendors as well as commitments to purchase goods and services such as telecommunication and computer maintenance services. These purchase commitments are agreements that are enforceable and legally binding on FactSet, and they specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. As of August 31, 2020, the Company had total purchase commitments with suppliers of $226.0 million. During the three months ended November 30, 2020, FactSet entered into a software subscription agreement with total purchase commitments of approximately $10.0 million with a contract term of three years. There were no other material changes in the Company’s purchase commitments during the three months ended November 30, 2020.
Letters of Credit
From time to time, FactSet is required to obtain letters of credit in the ordinary course of business, with approximately $2.9 million of standby letters of credit outstanding as of November 30, 2020. These standby letters of credit utilize the same covenants included in the 2019 Credit Agreement. Refer to Note 11, Debt for more information on these covenants.
Income Taxes
Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 9, Income Taxes, for further details. FactSet is currently under audit by tax authorities and has reserved for potential adjustments to its provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities. The Company believes that the final outcome of these examinations or settlements will not have a material effect on its results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period FactSet determines the liabilities are no longer necessary. If the Company’s estimates of the federal, state, and foreign income tax liabilities are less than the ultimate assessment, a further charge to expense would result.
Legal Matters
FactSet accrues non-income tax liabilities for contingencies when management believes that a loss is probable, and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. The Company is engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business, including employment matters, commercial and intellectual property litigation. The outcome of all the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information available at November 30, 2020, FactSet’s management believes that the ultimate outcome of these unresolved matters against the Company, individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position, its results of operations or its cash flows.
Sales Tax Matters
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 (the "Commonwealth") relating to prior tax periods. The Notice follows FactSet's previously disclosed response to a letter from the Commonwealth requesting additional sales information. Based upon the Notice, it is the Commonwealth's intention to assess sales/use tax, interest and penalties on previously recorded sales transactions. The Company filed an appeal to the Notice and intends to contest any such assessment, if assessed, and continues to cooperate with the Commonwealth's inquiry. Due to the 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 November 30, 2020. FactSet believes that it will ultimately prevail if the Company is presented with a formal assessment; however, if FactSet does not prevail, the amount could have a material impact on the Company’s consolidated financial position, cash flows and results of operations.
As permitted or required under Delaware law and to the maximum extent allowable under that law, FactSet has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at FactSet’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best

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interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments FactSet could be required to make under these indemnification obligations is unlimited; however, FactSet has a director and officer insurance policy that it believes mitigates FactSet’s exposure and may enable FactSet to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification obligations is immaterial.

Concentrations of Credit Risk
Cash equivalents
Financial instruments that potentially subject FactSet to concentrations of credit risk consist primarily of cash, cash equivalents and investment securities. The Company is exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits. To mitigate associated concentration risk, FactSet utilizes credit-worthy financial institutions. The Company also seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties.
Accounts Receivable
Accounts receivable are unsecured and are derived from revenue earned from clients located around the globe. The Company does not require collateral from its clients but performs credit evaluations on an ongoing basis. The Company maintains reserves for potential write-offs and evaluates the adequacy of the reserves periodically. These losses have historically been within expectations. No single client represented more than 3% of FactSet’s total subscription revenue in any period presented. As of November 30, 2020, the receivable reserve was $7.3 million compared to $