10-Q 1 fds-20220228.htm 10-Q fds-20220228
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________
Form 10-Q
_________________________________________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to ______

Commission File Number: 1-11869
_________________________________________________
FACTSET RESEARCH SYSTEMS INC.
(Exact name of registrant as specified in its charter)
fds-20220228_g1.jpg
_________________________________________________
Delaware13-3362547
(State or other jurisdiction of
incorporation)
(I.R.S. Employer
Identification No.)
45 Glover Avenue, Norwalk, Connecticut
06850
(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 March 28, 2022 was 37,896,579.


FactSet Research Systems Inc.
Form 10-Q
For the Quarter Ended February 28, 2022
Index
Page
Consolidated Statements of Comprehensive Income for the three and six months ended February 28, 2022 and 2021
Consolidated Balance Sheets at February 28, 2022 and August 31, 2021
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 (https://investor.factset.com). Any information on or linked from the website is not incorporated by reference into this Quarterly Report on Form 10-Q.










2

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 three and six months ended February 28, 2022, 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, 2021, 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 do not intend, and are under no duty, to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to reflect actual results, future events or circumstances, or revised expectations.
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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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FactSet Research Systems Inc.
CONSOLIDATED STATEMENTS OF INCOME – Unaudited
Three Months EndedSix Months Ended
February 28,February 28,
(In thousands, except per share data)
2022202120222021
Revenues$431,119 $391,788 $855,844 $779,993 
Operating expenses
Cost of services199,395 195,523 406,544 383,611 
Selling, general and administrative108,376 80,132 203,291 159,219 
Total operating expenses307,771 275,655 609,835 542,830 
Operating income123,348 116,133 246,009 237,163 
Other income (expense), net
Interest expense, net(1,673)(1,814)(3,167)(2,843)
Other income (expense), net281 347 (956)578 
Income before income taxes121,956 114,666 241,886 234,898 
Provision for income taxes12,018 18,023 24,301 37,049 
Net income$109,938 $96,643 $217,585 $197,849 
Basic earnings per common share$2.91 $2.55 $5.77 $5.21 
Diluted earnings per common share$2.84 $2.50 $5.63 $5.12 
Basic weighted average common shares37,837 37,916 37,685 37,961 
Diluted weighted average common shares38,761 38,620 38,628 38,658 
The accompanying notes are an integral part of these Consolidated Financial Statements.










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FactSet Research Systems Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – Unaudited
Three Months EndedSix Months Ended
February 28,February 28,
(In thousands)
2022202120222021
Net income$109,938 $96,643 $217,585 $197,849 
Other comprehensive income (loss), net of tax
Net unrealized gain on cash flow hedges*4,805 1,303 4,810 1,187 
Foreign currency translation adjustment (losses) gains(2,983)9,277 (21,696)9,610 
Other comprehensive income (loss)1,822 10,580 (16,886)10,797 
Comprehensive income$111,760 $107,223 $200,699 $208,646 
*For the three and six months ended February 28, 2022, the net unrealized gain on cash flow hedges were net of a tax expense of $468 thousand and a tax expense of $469 thousand, respectively. For the three and six months ended February 28, 2021, the net unrealized gain on cash flow hedges were net of a tax expense of $441 thousand and a tax expense of $400 thousand, respectively.
The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.
CONSOLIDATED BALANCE SHEETS – Unaudited
(In thousands, except share data)
February 28, 2022August 31, 2021
ASSETS
Cash and cash equivalents$773,012 $681,865 
Investments34,984 35,984 
Accounts receivable, net of reserves of $4,263 at February 28, 2022 and $6,431 at August 31, 2021
188,308 151,187 
Prepaid taxes36,569 13,917 
Prepaid expenses and other current assets57,786 50,625 
Total current assets1,090,659 933,578 
Property, equipment and leasehold improvements, net114,789 131,377 
Goodwill786,172 754,205 
Intangible assets, net135,042 134,986 
Deferred taxes2,169 2,250 
Lease right-of-use assets, net206,237 239,064 
Other assets39,089 29,480 
TOTAL ASSETS$2,374,157 $2,224,940 
LIABILITIES
Accounts payable and accrued expenses$90,262 $85,777 
Current lease liabilities31,010 31,576 
Accrued compensation68,749 104,403 
Deferred revenues72,152 63,104 
Dividends payable31,065 30,845 
Total current liabilities293,238 315,705 
Long-term debt574,625 574,535 
Deferred taxes15,018 14,752 
Deferred revenues, non-current7,233 8,394 
Taxes payable31,002 30,279 
Long-term lease liabilities233,275 259,980 
Other liabilities3,785 4,942 
TOTAL LIABILITIES$1,158,176 $1,208,587 
Commitments and contingencies (see Note 12)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued
$ $ 
Common stock, $0.01 par value, 150,000,000 shares authorized, 41,485,261 and 41,163,192 shares issued, 37,883,866 and 37,615,419 shares outstanding at February 28, 2022 and August 31, 2021, respectively
415 412 
Additional paid-in capital1,131,166 1,048,305 
Treasury stock, at cost: 3,601,395 and 3,547,773 shares at February 28, 2022 and August 31, 2021, respectively
(927,814)(905,917)
Retained earnings1,068,062 912,515 
Accumulated other comprehensive loss(55,848)(38,962)
TOTAL STOCKHOLDERS’ EQUITY$1,215,981 $1,016,353 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$2,374,157 $2,224,940 
The accompanying notes are an integral part of these Consolidated Financial Statements.
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FactSet Research Systems Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited
Six Months Ended
February 28,
(in thousands)20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$217,585 $197,849 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization32,827 30,962 
Amortization of lease right-of-use assets22,172 21,517 
Stock-based compensation expense25,937 22,327 
Deferred income taxes(3,264)(2,802)
Impairment charge13,987  
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable, net of reserves(37,704)(15,421)
Accounts payable and accrued expenses10,183 (724)
Accrued compensation(34,680)(20,879)
Deferred fees6,201 12,445 
Taxes payable, net of prepaid taxes(21,824)16,688 
Lease liabilities, net(23,863)(20,549)
Other, net(12,605)(11,477)
Net cash provided by operating activities194,952 229,936 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, equipment, leasehold improvements and internal-use software(20,546)(28,758)
Acquisition of businesses, net of cash and cash equivalents acquired(50,018)(41,916)
Purchases of investments(250)(1,250)
Proceeds from maturity or sale of investments 2,176 
Net cash used in investing activities(70,814)(69,748)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock(18,639)(114,640)
Dividend payments(61,448)(58,186)
Proceeds from employee stock plans56,928 28,526 
Other financing activities(3,258)(2,359)
Net cash used by financing activities(26,417)(146,659)
Effect of exchange rate changes on cash and cash equivalents(6,574)3,550 
Net increase in cash and cash equivalents91,147 17,079 
Cash and cash equivalents at beginning of period681,865 585,605 
Cash and cash equivalents at end of period$773,012 $602,684 
The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY- Unaudited
For the Three Months Ended February 28, 2022
(in thousands, except share data)Common StockAdditional
Paid-in
Capital
Treasury StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar ValueSharesAmount
Balance as of November 30, 202141,372,890 $414 $1,094,467 3,600,720 $(927,505)$989,189 $(57,670)$1,098,895 
Net income109,938 109,938 
Other comprehensive loss1,822 1,822 
Common stock issued for employee stock plans111,360 1 21,163 260 (128)21,036 
Vesting of restricted stock1,011 — 415 (181)(181)
Repurchases of common stock 
Stock-based compensation15,536 15,536 
Dividends declared(31,065)(31,065)
Balance as of February 28, 202241,485,261 $415 $1,131,166 3,601,395 $(927,814)$1,068,062 $(55,848)$1,215,981 
For the Six Months Ended February 28, 2022
(in thousands, except share data)Common StockAdditional
Paid-in
Capital
Treasury StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar ValueSharesAmount
Balance as of August 31, 202141,163,192 $412 $1,048,305 3,547,773 $(905,917)$912,515 $(38,962)$1,016,353 
Net income217,585 217,585 
Other comprehensive income(16,886)(16,886)
Common stock issued for employee stock plans303,709 3 56,924 260 (128)56,799 
Vesting of restricted stock18,360 — 7,162 (3,130)(3,130)
Repurchases of common stock46,200 (18,639)(18,639)
Stock-based compensation25,937 25,937 
Dividends declared(62,038)(62,038)
Balance as of February 28, 202241,485,261 $415 $1,131,166 3,601,395 $(927,814)$1,068,062 $(55,848)$1,215,981 



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For the Three Months Ended February 28, 2021
(in thousands, except share data)Common StockAdditional
Paid-in
Capital
Treasury StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
SharesPar ValueSharesAmount
Balance as of November 30, 202040,884,113 $409 $968,375 2,875,984 $(682,224)$705,089 $(39,076)$952,573 
Net income96,643 96,643 
Other comprehensive income10,580 10,580 
Common stock issued for employee stock plans58,550  10,533 318 (104)10,429 
Vesting of restricted stock997 — 401 (131)(131)
Repurchases of common stock221,959 (71,495)(71,495)
Stock-based compensation11,010 11,010 
Dividends declared(29,141)(29,141)
Balance as of February 28, 202140,943,660 $409 $989,918 3,098,662 $(753,954)$772,591 $(28,496)$980,468 
For the Six Months Ended February 28, 2021
(in thousands, except share data)Common StockAdditional
Paid-in
Capital
Treasury StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Stockholders’
Equity
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 income197,849 197,849 
Other comprehensive loss10,797 10,797 
Common stock issued for employee stock plans157,009 1 28,524 318 (104)28,421 
Vesting of restricted stock18,943 — 7,129 (2,254)(2,254)
Repurchases of common stock353,759 (114,640)(114,640)
Stock-based compensation22,327 22,327 
Dividends declared(58,407)(58,407)
Balance as of February 28, 202140,943,660 $409 $989,918 3,098,662 $(753,954)$772,591 $(28,496)$980,468 
The accompanying notes are an integral part of these Consolidated Financial Statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FactSet Research Systems Inc.
February 28, 2022
(Unaudited)
Page
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
Note 17Subsequent Event

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1. DESCRIPTION OF BUSINESS
FactSet Research Systems Inc. and its wholly-owned subsidiaries (collectively, "we," "our," "us," the "Company" or "FactSet") is a global financial data and analytics company with an open and flexible digital platform which focuses on driving the investment community to see more, think bigger, and do its best work. Our strategy is to build the leading open content and analytics platform that delivers a differentiated advantage for our clients’ success.
For over 40 years, the FactSet platform has delivered expansive data, sophisticated analytics, and flexible technology that global financial professionals need to power their critical investment workflows. More than 171,000 investment professionals including asset managers, asset owners, bankers, wealth managers, corporate users, private equity and venture capital professionals, and others use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage. Our solutions span investment research, portfolio construction and analysis, trade execution, performance measurement, risk management, and reporting across the investment lifecycle.
We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as offering them the capabilities to analyze, monitor and manage their portfolios. We combine dedicated client service with open and flexible technology offerings, such as a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and application programming interfaces ("APIs"). Our revenues are primarily derived from subscriptions to our products and services such as workstations, portfolio analytics, and market data.
We advance our industry by comprehensively understanding our clients’ workflows, solving their most complex challenges, and helping them achieve their goals. By providing them with the leading open content and analytics platform, an expansive universe of concorded data they can trust, next-generation workflow support designed to help them grow and see their next best action, and the industry’s most committed service specialists, we put our clients in a position to outperform.
We are focused on growing our business through three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. Refer to Note 16, Segment Information, for further information. Within each of our segments, we deliver insight and information through our three workflows: Research & Advisory Solutions; Analytics & Trading Solutions; and Content & Technology Solutions ("CTS").
2. BASIS OF PRESENTATION
We conduct business globally and manage our business on a geographic basis. The accompanying unaudited Consolidated Financial Statements and Notes to the 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 information and footnotes required by GAAP for annual financial statements, as such, 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 our Annual Report on Form 10-K for the fiscal year ended August 31, 2021. The accompanying Consolidated Financial Statements include our accounts and those of our 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 our results of operations, financial position, cash flows and equity.
We have evaluated subsequent events through the date of issuance of the financial statements included in this Quarterly Report on Form 10-Q, refer to Note 17, Subsequent Events for more information.
Use of Estimates
The preparation of our Consolidated Financial Statements and related disclosures, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Significant estimates may have been made in areas that include income taxes, stock-based compensation, the valuation of goodwill and allocation of purchase price to acquired assets and liabilities, useful lives and impairments of
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long-lived tangible and intangible assets and reserves for litigation and other contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.
3. RECENT ACCOUNTING PRONOUNCEMENTS
As of February 28, 2022, we implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect. There were no new standards or updates adopted during the six months ended February 28, 2022 that had a material impact on our Consolidated Financial Statements.
New Accounting Standards or Updates Recently Adopted 
Income Tax Simplification
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes, to simplify various aspects related to accounting for income taxes, eliminating certain exceptions to the general principles in accounting for income taxes related to intraperiod tax allocation, simplifying when companies recognize deferred taxes in an interim period, and clarifying certain aspects of the current guidance to promote consistent application. We have adopted this standard effective September 1, 2021. The adoption of this standard did not have an impact on our Consolidated Financial Statements.
Business Combinations
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (“Topic 606”) rather than adjust them to fair value at the acquisition date. We elected to early adopt this accounting standard in the second quarter of fiscal 2022, with retrospective application to business combinations that occurred in the current fiscal year. Results of operations for quarterly periods prior to September 1, 2021 remain unchanged as a result of the adoption of ASU No. 2021-08. The acquisition of Cobalt Software, Inc (“Cobalt”), and all future acquisitions, will be accounted for in accordance with ASU 2021-08. Refer to Note 7. Acquisition for further information. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.
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.
On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement, which bore interest based on the LIBOR rate. Concurrently, on March 1, 2022, FactSet Research Systems Inc. entered into the 2022 Credit Agreement, which bears interest based on the Secured Overnight Financing Rate ("SOFR") rate. The adoption of this standard will not have an impact on our Consolidated Financial Statements. Refer to Note 11, Debt and Note 17, Subsequent Events for definitions of these terms and more information on the 2019 Credit Agreement and 2022 Credit Agreement.
No other new accounting pronouncements issued or effective as of February 28, 2022 have had, or are expected to have, a material impact on our Consolidated Financial Statements.
4. REVENUE RECOGNITION
We derive most of our revenues by providing client access to our hosted proprietary data and analytics platform which can include various combinations of products and services available over the contractual term. The hosted platform is a subscription-based service that consists primarily of providing access to products and services including workstations, portfolio analytics and market data. We determined that the majority of our 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
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transfer to the client. We also determined the primary 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 us, we apply an output time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. We record revenues for our contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied. We do not consider payment terms as a performance obligation for clients with contractual terms that are one year or less and we have elected the practical expedient.
Contracts with clients can include certain fulfillment costs, comprised of up-front costs to allow for the delivery of services and products, which are recoverable. In connection with the adoption of the revenue recognition standard, fulfillment costs are recognized as an asset, with the current portion recorded in the Prepaid expenses and other current assets and the non-current portion recorded in Other assets, based on the term of the license period. The fulfillment costs are amortized consistent with the associated revenues for providing the services. There are no significant judgments that would impact the timing of revenue recognition. The majority of client contracts have a duration of one year or less, or the amount we are entitled to receive corresponds directly with the value of performance obligations completed to date, and therefore, we do not disclose the value of the remaining unsatisfied performance obligations. 
Disaggregated Revenues 
We disaggregate revenues from contracts with clients by our reportable segments ("segments") which consist of the Americas, EMEA and Asia Pacific. We believe these segments are reflective of how we manage our business and the markets in which we serve and best depict the nature, amount, timing and uncertainty of revenues and cash flows related to contracts with clients. Refer to Note 16, Segment Information, for further information. 
The following table presents this disaggregation by segment:
 
Three Months EndedSix Months Ended
February 28,February 28,
(in thousands)
2022202120222021
Americas$273,659 $247,991 $540,572 $492,327 
EMEA
114,591 105,493 229,594 211,270 
Asia Pacific42,869 38,304 85,678 76,396 
Total Revenues$431,119 $391,788 $855,844 $779,993 
5. FAIR VALUE MEASURES
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 is permissible. We consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability. 
Fair Value Hierarchy 
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. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. We have categorized our cash equivalents, investments and derivatives within the fair value hierarchy as follows: 
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 our 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
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significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Our mutual funds and derivative instruments are classified as Level 2. 
Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. We held no Level 3 assets or liabilities as of February 28, 2022 or August 31, 2021.
(a) Assets and Liabilities Measured at Fair Value on a Recurring Basis 
The following tables show, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis at February 28, 2022 and August 31, 2021. We did not have any transfers between levels of fair value measurements during the periods presented.
 
Fair Value Measurements at February 28, 2022
(in thousands)Level 1Level 2Total
Assets
 
 
 
Corporate money market funds (1)
$167,562 $ $167,562 
Mutual funds (2)
 34,984 34,984 
Derivative instruments (3)
 4,592 4,592 
Total assets measured at fair value$167,562 $39,576 $207,138 
Liabilities
Derivative instruments (3)
$ $2,110 $2,110 
Total liabilities measured at fair value$ $2,110 $2,110 
 
Fair Value Measurements at August 31, 2021
(in thousands)Level 1Level 2Total
Assets
 
 
 
Corporate money market funds (1)
$232,519 $ $232,519 
Mutual funds (2)
 35,984 35,984 
Derivative instruments (3)
 1,384 1,384 
Total assets measured at fair value$232,519 $37,368 $269,887 
Liabilities
Derivative instruments (3)
$ $4,181 $4,181 
Total liabilities measured at fair value$ $4,181 $4,181 

1.Our 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. Our corporate money market funds are classified as Level 1 assets and are included in Cash and cash equivalents within the Consolidated Balance Sheets.
2.Our 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. Our mutual funds are classified as Level 2 and are included in Investments (short-term) within the Consolidated Balance Sheets.
3.Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements. We utilize the income approach to measure fair value for our foreign exchange forward contracts. The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads, and are classified as Level 2 assets. To estimate fair value for the interest rate swap agreement, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. Refer to Note 6, Derivative Instruments, for more information on our derivative instruments designed as cash flow hedges and their classification within the Consolidated Balance Sheets.
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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 non-recurring basis relate primarily to our tangible fixed assets, lease right-of-use ("ROU") assets, goodwill and intangible assets. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections. These non-financial assets are required to be assessed for impairment whenever events or circumstances indicate that their carrying value may not be fully recoverable, and at least annually for goodwill.
During the three and six months ended February 28, 2022, we incurred an impairment charge of $9.7 million and $13.4 million, respectively, related to our lease ROU assets and Property, equipment and leasehold improvements associated with vacating certain leased office space. For those locations we anticipate subleasing, we estimated the fair value of the lease ROU assets as of the cease use date, using a market approach, based on expected future cash flows from sublease income. To complete this assessment we relied on certain assumptions, which included estimates of the rental rate, period of vacancy, incentives and annual rent increases. We fully impaired both the lease ROU assets for locations we will not sublease and the Property, equipment and leasehold improvements balances associated with the related vacated leased office space as there are no expected cash flows related to these items. As a result of the subjective nature of unobservable inputs used, these assets are classified within Level 3 of the fair value hierarchy.
(c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only 
As of February 28, 2022 and August 31, 2021, the fair value of our 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.
On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement and concurrently, FactSet Research Systems Inc. entered into the 2022 Credit Agreement. Refer to Note 17, Subsequent Events for definition of these terms and more information on the 2022 Credit Agreement.
6. DERIVATIVE INSTRUMENTS
Cash Flow Hedges 
Foreign Currency Forward Contracts
We conduct business outside the U.S. in several currencies including the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso. As such, we are exposed to movements in foreign currency exchange rates. We utilize derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes. We limit counterparties to credit-worthy financial institutions. Refer to Note 12, Commitments and Contingencies – Concentrations of Credit Risk, for further discussion on counterparty credit risk. 
In designing a specific hedging approach, we considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge. 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 six months ended February 28, 2022 or February 28, 2021, and as such, no corresponding gains or losses related to changes in the value of our contracts were reclassified into earnings prior to settlement. 
As of February 28, 2022, we maintained foreign currency forward contracts to hedge a portion of our British Pound Sterling, Euro, Indian Rupee and Philippine Peso exposures. We entered into a series of forward contracts to mitigate our currency
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exposure ranging from 25% to 50% over their respective hedged periods. The current foreign currency forward contracts are set to mature at various points between the third quarter of fiscal 2022 through the first quarter of fiscal 2023.
As of February 28, 2022, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S. dollars was ₱0.9 billion and Rs1.7 billion, respectively. The gross notional value of foreign currency forward contracts to purchase Euros and British Pound Sterling with U.S. dollars was €23.0 million and £24.3 million, respectively.
2020 Swap Agreement
On March 5, 2020, we entered into an interest rate swap agreement (the "2020 Swap Agreement") with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of our outstanding debt under our 2019 Revolving Credit Facility (as defined below in Note 11, Debt). As of February 28, 2022, we have borrowed $575.0 million of the available $750.0 million under the 2019 Revolving Credit Facility, which bears interest on the outstanding principal amount at a rate equal to contractual one-month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of February 28, 2022. Refer to Note 11, Debt, for further discussion on the 2019 Revolving Credit Facility. Under the terms of the 2020 Swap Agreement, we will pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The 2020 Swap Agreement matures on March 29, 2024.
Refer to Interest Rate Risk in Part I, Item 3 of this Quarterly Report on Form 10-Q for further discussion on our exposure to interest rate risk on our long-term debt outstanding.
As the terms for the 2020 Swap Agreement align with the 2019 Revolving Credit Facility, we do not expect any hedge ineffectiveness. We have designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets. Realized gains or losses are subsequently reclassified into Interest expense, net in the Consolidated Statement of Income when settled.
The following is a summary of the gross notional values of the derivative instruments:

(in thousands)
Gross Notional Value
February 28, 2022August 31, 2021
Foreign currency forward contracts$99,609 $154,728 
Interest rate swap agreement287,500 287,500 
Total cash flow hedges$387,109 $442,228 

Fair Value of Derivative Instruments
The following is a summary of the fair values of the derivative instruments:
Fair Value of Derivative Instruments
(in thousands)Derivative AssetsDerivative Liabilities
Derivatives designated as hedging instrumentsBalance Sheet ClassificationFebruary 28, 2022August 31, 2021Balance Sheet ClassificationFebruary 28, 2022August 31, 2021
Foreign currency forward contractsPrepaid expenses and other current assets$180 $1,384 Accounts payable and accrued expenses$2,110 $1,201 
Interest rate swap agreementPrepaid expenses and other current assets820  Accounts payable and accrued expenses 1,934 
Other assets3,592  Other liabilities 1,045 
Total cash flow hedges$4,592 $1,384 $2,110 $4,181 

All derivatives were designated as hedging instruments as of February 28, 2022 and August 31, 2021.
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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 the three months ended February 28, 2022 and February 28, 2021, respectively:

Gain (Loss) Reclassified in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
(in thousands)February 28,February 28,
Derivatives in Cash Flow Hedging Relationships2022202120222021
Foreign currency forward contracts$(34)$1,879 SG&A$(1,014)$2,069 
Interest rate swap agreement3,795 1,462 Interest expense, net(498)(472)
Total cash flow hedges$3,761 $3,341 $(1,512)$1,597 
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the six months ended February 28, 2022 and February 28, 2021, respectively:
Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
(in thousands)February 28,February 28,
Derivatives in Cash Flow Hedging Relationships2022202120222021
Foreign currency forward contracts$(3,576)$2,127 SG&A$(1,463)$2,886 
Interest rate swap agreement6,378 1,406 Interest expense, net(1,014)(942)
Total cash flow hedges$2,802 $3,533 $(2,477)$1,944 
As of February 28, 2022, our cash flow hedges were effective, with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges, and all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

As of February 28, 2022, we estimate that net pre-tax derivative losses of $1.9 million related to the foreign currency forward contracts included in AOCL will be reclassified into earnings within the next 12 months. As of March 1, 2022, we terminated the 2020 Swap Agreement. Refer to Note 17, Subsequent Events for more information on the termination and the expected impact reclassified into earnings.
Offsetting of Derivative Instruments
We enter into master netting arrangements designed to permit net settlement of derivative transactions among the respective counterparties, settled on the same date and in the same currency. As of February 28, 2022 and August 31, 2021, there were no material amounts recorded net on the Consolidated Balance Sheets.
2022 Swap Agreement
As we desire to maintain a fixed to floating interest rate ratio of 80% on our outstanding debt portfolio, we entered into the 2022 Swap Agreement with a notional amount $800.0 million on March 1, 2022. The 2022 Swap Agreement will hedge our floating Term SOFR rate outstanding debt with a fixed rate of 1.162%. Refer to Note 17, Subsequent Events for the definition and more information on the 2022 Swap Agreement.
7. ACQUISITIONS
During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of Cobalt Software, Inc. ("Cobalt") and Truvalue Labs, Inc. ("TVL").
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On March 1, 2022, we completed the acquisition of CUSIP Global Services (“CGS"), previously operated by S&P Global Inc., on behalf of the American Bankers Association, for $1.925 billion in cash, subject to a working capital adjustment. Refer to Note 17, Subsequent Events for more information on our acquisition of CGS.
Cobalt Software, Inc.
On October 12, 2021, we acquired all of the outstanding shares of Cobalt for a purchase price of $50.0 million, net of cash acquired. Cobalt is a leading portfolio monitoring solutions provider for the private capital industry. This acquisition advances our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering. The Cobalt purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We expect to finalize the allocation of the purchase price for Cobalt as soon as possible, but in any event, no later than one year from the acquisition date.
The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
Acquisition Date Fair ValueAcquisition Date Useful LifeAmortization Method
(in thousands)(in years)
Current assets$540 
Amortizable intangible assets
Software technology7,750 5 yearsStraight-line
Client relationships4,800 11 yearsStraight-line
Goodwill43,554 
Other assets34 
Current liabilities(6,653)
Other liabilities(7)
Total purchase price$50,018 
Goodwill totaling $43.6 million represents the excess of the Cobalt purchase price over the fair value of net assets acquired and is included in the Americas and EMEA segments. Goodwill generated from the Cobalt acquisition is not deductible for income tax purposes. The results of Cobalt's operations have been included in our Consolidated Financial Statements, within the Americas and EMEA segments, beginning with its acquisition on October 12, 2021. Pro forma information has not been presented because the effect of the Cobalt acquisition is not material to our Consolidated Financial Statements.
Truvalue Labs, Inc.
On November 2, 2020, we acquired all of the outstanding shares of TVL for a purchase price of $41.9 million, net of cash acquired. TVL is a leading provider of environmental, social, and governance ("ESG") information. TVL applies artificial intelligence driven technology to over 100,000 unstructured text sources in multiple languages, including news, trade journals, and non-governmental organizations and industry reports, to provide daily signals that identify positive and negative ESG behavior. The acquisition of TVL further enhances our commitment to providing industry leading access to ESG data across our platforms. The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the TVL acquisition during the third quarter of fiscal 2021.

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The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:
Acquisition Date Fair ValueAcquisition Date Useful LifeAmortization Method
(in thousands)(in years)
Current assets$812 
Amortizable intangible assets
Software technology8,100 7 yearsStraight-line
Client relationships900 12 yearsStraight-line
Trade names2,800 15 yearsStraight-line
Goodwill30,058 
Other assets5,299 
Current liabilities(3,069)
Other liabilities(2,984)
Total purchase price$41,916 
Goodwill totaling $30.1 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 TVL's operations have been included in our Consolidated Financial Statements, within the Americas segment, beginning with its acquisition on November 2, 2020. Pro forma information has not been presented because the effect of the TVL acquisition is not material to our Consolidated Financial Statements.
8. GOODWILL
Changes in the carrying amount of goodwill by segment for the six months ended February 28, 2022 are as follows:
(in thousands)
AmericasEMEA
Asia Pacific
Total
Balance at August 31, 2021$430,088 $321,150 $2,967 $754,205 
Acquisitions43,769 428  44,197 
Foreign currency translations (12,101)(129)(12,230)
Balance at February 28, 2022$473,857 $309,477 $2,838 $786,172 

Goodwill is not amortized as it is estimated to have an indefinite life. At least annually, we are required to test goodwill at the reporting unit level, which is consistent with our segments, for potential impairment, and, if impaired, we write down our goodwill to fair value based on the present value of discounted cash flows. We performed our annual goodwill impairment test during the fourth quarter of fiscal 2021 utilizing a qualitative analysis, consistent with the timing of previous years. We concluded it was more likely than not that the fair value of each of our segments was greater than its respective carrying value and no impairment charge was required.
9. INCOME TAXES
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.
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Provision for Income Taxes
The provision for income taxes is as follows:
Three Months EndedSix Months Ended
February 28,February 28,
(in thousands)2022202120222021
Income before income taxes$121,956 $114,666 $241,886 $234,898 
Provision for income taxes$12,018 $18,023 $24,301 $37,049 
Effective tax rate9.9 %15.7 %10.0 %15.8 %
Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income. Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other non-recurring events that may not be predictable. Our effective tax rate is lower than the applicable U.S. corporate income tax rate for the three and six months ended February 28, 2022, 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 and six months ended February 28, 2022 is further reduced by windfall tax benefits associated with the employee exercise of stock options.
For the three months ended February 28, 2022, the provision for income taxes was $12.0 million, compared with $18.0 million for the same period a year ago. The provision decreased mainly due to lower projected levels of income before income taxes, a lower effective tax rate compared to the prior year period and a $