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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 November 30, 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-20221130_g1.jpg
_________________________________________________
Delaware13-3362547
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
45 Glover Avenue, Norwalk, Connecticut
06850
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (203) 810-1000

Former name, former address and former fiscal year, if changed since last report: None
_________________________________________________
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
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
The number of shares outstanding of the registrant’s common stock, $.01 par value, as of December 27, 2022 was 38,251,828.


Table of Contents
FactSet Research Systems Inc.
Form 10-Q
For the Quarter Ended November 30, 2022
Index
Page
Consolidated Statements of Comprehensive Income for the three months ended November 30, 2022 and 2021
Consolidated Balance Sheets at November 30, 2022 and August 31, 2022
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.










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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 three months ended November 30, 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, 2022, 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 Ended
November 30,
(In thousands, except per share data)
20222021
Revenues$504,815 $424,725 
Operating expenses
Cost of services227,042 207,131 
Selling, general and administrative105,596 91,238 
Asset impairments282 3,695 
Total operating expenses332,920 302,064 
Operating income171,895 122,661 
Other income (expense), net
Interest expense, net(14,332)(1,494)
Other income (expense), net322 (1,237)
Total other income (expense), net(14,010)(2,731)
Income before income taxes157,885 119,930 
Provision for income taxes21,087 12,283 
Net income$136,798 $107,647 
Basic earnings per common share$3.59 $2.86 
Diluted earnings per common share$3.52 $2.79 
Basic weighted average common shares38,122 37,678 
Diluted weighted average common shares38,914 38,641 
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 Ended
November 30,
(In thousands)
20222021
Net income$136,798 $107,647 
Other comprehensive income (loss), net of tax
Net unrealized gain (loss) on cash flow hedges*6,555 5 
Foreign currency translation adjustment gains (losses)8,769 (18,713)
Other comprehensive income (loss)15,324 (18,708)
Comprehensive income$152,122 $88,939 
*For the three months ended November 30, 2022 and 2021, the net unrealized gain on cash flow hedges were net of a tax expense of $2,264 thousand and $1 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)
November 30, 2022August 31, 2022
ASSETS
Cash and cash equivalents$437,142 $503,273 
Investments32,572 33,219 
Accounts receivable, net of reserves of $3,532 at November 30, 2022 and $2,776 at August 31, 2022
227,489 204,102 
Prepaid taxes32,178 38,539 
Prepaid expenses and other current assets99,826 91,214 
Total current assets829,207 870,347 
Property, equipment and leasehold improvements, net79,296 80,843 
Goodwill974,846 965,848 
Intangible assets, net1,882,983 1,895,909 
Deferred taxes3,653 3,153 
Lease right-of-use assets, net154,125 159,458 
Other assets53,430 38,747 
TOTAL ASSETS$3,977,540 $4,014,305 
LIABILITIES
Accounts payable and accrued expenses$122,710 $108,395 
Current lease liabilities28,970 29,185 
Accrued compensation48,067 114,808 
Deferred revenues150,264 152,039 
Dividends payable34,010 33,860 
Total current liabilities384,021 438,287 
Long-term debt1,859,096 1,982,424 
Deferred taxes10,991 8,800 
Deferred revenues, non-current8,697 7,212 
Taxes payable35,334 34,211 
Long-term lease liabilities201,964 208,622 
Other liabilities3,309 3,341 
TOTAL LIABILITIES$2,503,412 $2,682,897 
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; 41,848,430 and 41,653,218 shares issued; 38,214,108 and 38,044,756 shares outstanding at November 30, 2022 and August 31, 2022, respectively
418 417 
Additional paid-in capital1,225,947 1,190,350 
Treasury stock, at cost: 3,634,322 and 3,608,462 shares at November 30, 2022 and August 31, 2022, respectively
(941,705)(930,715)
Retained earnings1,282,527 1,179,739 
Accumulated other comprehensive loss(93,059)(108,383)
TOTAL STOCKHOLDERS’ EQUITY$1,474,128 $1,331,408 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,977,540 $4,014,305 
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
Three Months Ended
November 30,
(in thousands)20222021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$136,798 $107,647 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization25,997 17,208 
Amortization of lease right-of-use assets9,697 11,117 
Stock-based compensation expense12,175 10,401 
Deferred income taxes(745)1,507 
Asset impairments282 3,695 
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable, net of reserves(23,647)(5,268)
Accounts payable and accrued expenses18,744 20,702 
Accrued compensation(66,796)(53,457)
Deferred revenues(290)(10,248)
Taxes payable, net of prepaid taxes6,995 (9,524)
Lease liabilities, net(11,237)(11,992)
Other, net(1,337)(8,870)
Net cash provided by operating activities106,636 72,918 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, equipment, leasehold improvements and internal-use software(17,960)(8,583)
Acquisition of businesses, net of cash and cash equivalents acquired (50,018)
Purchases of investments(9,892)(250)
Net cash used in investing activities(27,852)(58,851)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of debt(125,000) 
Dividend payments(33,665)(30,656)
Proceeds from employee stock plans23,423 35,763 
Repurchases of common stock (18,639)
Other financing activities(10,990)(2,950)
Net cash provided by / (used in) financing activities(146,232)(16,482)
Effect of exchange rate changes on cash and cash equivalents1,317 (5,550)
Net increase (decrease) in cash and cash equivalents(66,131)(7,965)
Cash and cash equivalents at beginning of period503,273 681,865 
Cash and cash equivalents at end of period$437,142 $673,900 
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 November 30, 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, 202241,653,218 $417 $1,190,350 3,608,462 $(930,715)$1,179,739 $(108,383)$1,331,408 
Net income136,798 136,798 
Other comprehensive income (loss)15,324 15,324 
Common stock issued for employee stock plans131,423 1 23,422 410 (166)23,257 
Vesting of restricted stock63,789 — 25,450 (10,824)(10,824)
Repurchases of common stock— 
Stock-based compensation expense12,175 12,175 
Dividends declared(34,010)(34,010)
Balance as of November 30, 202241,848,430 $418 $1,225,947 3,634,322 $(941,705)$1,282,527 $(93,059)$1,474,128 



For the Three Months Ended November 30, 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, 202141,163,192 $412 $1,048,305 3,547,773 $(905,917)$912,515 $(38,962)$1,016,353 
Net income107,647 107,647 
Other comprehensive income (loss)(18,708)(18,708)
Common stock issued for employee stock plans192,349 2 35,761 35,763 
Vesting of restricted stock17,349 — 6,747 (2,949)(2,949)
Repurchases of common stock46,200 (18,639)(18,639)
Stock-based compensation expense10,401 10,401 
Dividends declared(30,973)(30,973)
Balance as of November 30, 202141,372,890 $414 $1,094,467 3,600,720 $(927,505)$989,189 $(57,670)$1,098,895 
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.
November 30, 2022
(Unaudited)
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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 that drives 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 to deliver a differentiated advantage for our clients’ success.
For 45 years, our platform has delivered expansive data, sophisticated analytics and flexible technology used by global financial professionals to power their critical investment workflows. As of November 30, 2022, we had more than 7,600 clients comprised of approximately 181,000 investment professionals, including asset managers, bankers, wealth managers, asset owners, channel partners, hedge funds, corporate users, private equity and venture capital professionals. Our on- and off-platform solutions span the investment lifecycle including investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery". Our products and services include workstations, portfolio analytics and enterprise solutions.
We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios. We combine dedicated client service with open and flexible technology offerings, including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). Our CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and back office functions.
We drive our business based on our detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges. We provide them with an open digital platform, connected and reliable data, next-generation workflow solutions and highly committed service specialists.
We operate our business through three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. Refer to Note 16, Segment Information, for further discussion. For each of our segments, we execute our strategy through three workflow solutions: Research & Advisory; Analytics & Trading; and Content & Technology Solutions ("CTS").
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, 2022. The accompanying unaudited 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.
Reclassifications
We reclassified comparative figures for the three months ended November 30, 2021 related to the impairment of our lease right-of-use ("ROU") assets and property, equipment and leasehold improvements to Asset impairments in the Consolidated Statements of Income and Consolidated Statements of Cash Flows to conform to the current year's presentation. The reclassifications to Asset impairments in the Consolidated Statements of Income was from Selling, general and administrative and Cost of services and in the Consolidated Statements of Cash Flows was from Depreciation and amortization and Lease liabilities, net.
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Use of Estimates
The preparation of our Consolidated Financial Statements and related disclosures, in conformity with GAAP, required 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 amounts of revenues and expenses during the reporting period. Significant estimates may have been made in areas that include income taxes, stock-based compensation, goodwill and intangible assets, business combinations, long-lived assets and 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.
Concentrations of Credit Risks
Cash equivalents
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents. We are 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. We have not experienced any losses from maintaining cash accounts in excess of such limits. We do not believe our concentration of cash and cash equivalents presents a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.
Accounts Receivable
Our accounts receivable credit risk is dependent upon the financial stability of our individual clients; however, this risk is generally limited due to our large and geographically dispersed client base. No single client represented more than 3% of our total subscription revenues in any period presented. The receivable reserve was $3.5 million and $2.8 million as of November 30, 2022 and August 31, 2022, respectively. We do not require collateral from our clients.
Derivative Instruments
Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and use several institutions to reduce concentration risk. We do not expect any losses as a result of default by our counterparties.
Concentrations of Data Providers
We integrate data from various third-party sources into our hosted proprietary data and analytics platform, which our clients access to perform their analyses. As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10% of our total data costs for the three months ended November 30, 2022.
Recently Adopted Accounting Pronouncements
We did not adopt any new standards or updates issued by the Financial Accounting Standards Board ("FASB") during the three months ended November 30, 2022 that had a material impact on our Consolidated Financial Statements.
Accounting Pronouncements Not Yet Adopted
Inflation Reduction Act of 2022
On August 16, 2022, the Inflation Reduction Act ("IRA") was signed into law. The IRA contains several revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% minimum income tax on certain large corporations and a 1% excise tax on corporate stock repurchases by publicly traded U.S. corporations. We are in the process of evaluating the impact of the IRA. We do not expect this law to have a material impact on our Consolidated Financial Statements.
No other new accounting pronouncements issued or effective as of November 30, 2022 have had, or are expected to have, a material impact on our Consolidated Financial Statements.
3. REVENUE RECOGNITION
We derive most of our revenues by providing client access to our multi-asset class solutions powered by our content refinery available over the associated contractual term (referred to as the "Hosted Platform"). The Hosted Platform is a subscription-
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based service that provides client access to various combinations of products and services including workstations, portfolio analytics and enterprise solutions. In addition, through our CGS platform, we provide subscription access to a database of universally recognized identifiers reflecting differentiating characteristics for issuers and their financial instruments (referred to as the "Identifier Platform").
We determined that the majority of each of our Hosted Platform and Identifier Platform services 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. We also determined the primary nature of the promise to the client is to provide daily access to each of these data and analytics platforms. These platforms provide integrated financial information, analytical applications and industry-leading service for the investment community. Based on the nature of the services and products offered by these platforms, we apply an output time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. We recognize revenue for the majority of these platforms in accordance with the 'as invoiced' practical expedient as the amount of consideration that we have the right to invoice corresponds directly with the value of our performance to date.
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 products and services, which are recoverable. 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 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 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. Segment revenues reflect sales to our clients based on their respective geographic locations. Refer to Note 16, Segment Information, for further information. 
The following table presents this disaggregation by segment:
 
Three Months Ended
November 30,
(in thousands)
20222021
Americas$323,367 $266,913 
EMEA
130,738 115,003 
Asia Pacific50,710 42,809 
Total Revenues$504,815 $424,725 
4. 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
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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.
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.
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.
(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 as of November 30, 2022 and August 31, 2022. We did not have any transfers between levels of fair value measurements during the periods presented below. We held no Level 3 assets or liabilities measured at fair value on a recurring basis as of November 30, 2022 and August 31, 2022.
 
Fair Value Measurements at November 30, 2022
(in thousands)Level 1Level 2Total
Assets
 
 
 
Corporate money market funds(1)
$210,951 $ $210,951 
Mutual funds(2)
 32,572 32,572 
Derivative instruments(3)
 15,410 15,410 
Total assets measured at fair value$210,951 $47,982 $258,933 
Liabilities
Derivative instruments(3)
$ $2,486 $2,486 
Total liabilities measured at fair value$ $2,486 $2,486 
 
Fair Value Measurements at August 31, 2022
(in thousands)Level 1Level 2Total
Assets
 
 
 
Corporate money market funds(1)
$179,330 $ $179,330 
Mutual funds(2)
 33,219 33,219 
Derivative instruments(3)
 12,412 12,412 
Total assets measured at fair value$179,330 $45,631 $224,961 
Liabilities
Derivative instruments(3)
$ $8,307 $8,307 
Total liabilities measured at fair value$ $8,307 $8,307 
(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 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 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
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market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads. To estimate fair value for our interest rate swap agreements, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses observable inputs such as interest rate yield curves. Refer to Note 5, Derivative Instruments, for more information on our derivative instruments and their classification within the Consolidated Balance Sheets.
(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 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 their carrying value may not be fully recoverable, and at least annually for goodwill.
(c) Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only 
We elected not to carry our Long-term debt at fair value. The carrying value of our Long-term debt is net of related unamortized discount and debt issuance costs.
The fair value of our Senior Notes is estimated based on quoted prices in active markets as of the reporting date, given that the Senior Notes are publicly traded, which are considered Level 1 inputs. The fair value of our 2022 Credit Facilities is estimated based on quoted market prices for similar instruments, adjusted for unobservable inputs to ensure comparability to our investment rating, maturity terms and principal outstanding, which are considered Level 3 inputs. Refer to Note 11, Debt for definitions of these terms and more information on the Senior Notes and 2022 Credit Facilities.
The following table summarizes information on our outstanding debt as of November 30, 2022 and August 31, 2022:
November 30, 2022August 31, 2022
(in thousands)Fair Value HierarchyPrincipal AmountEstimated Fair ValuePrincipal AmountEstimated Fair Value
2027 NotesLevel 1$500,000 $455,470 $500,000 $470,525 
2032 NotesLevel 1500,000 419,860 500,000 438,205 
2022 Term FacilityLevel 3625,000 627,344 750,000 750,975 
2022 Revolving FacilityLevel 3250,000 246,562 250,000 249,075 
Total principal amount$1,875,000 $1,749,236 $2,000,000 $1,908,780 
Total unamortized discounts and debt issuance costs(15,904)(17,576)
Total net carrying value of debt$1,859,096 $1,982,424 
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5. DERIVATIVE INSTRUMENTS
Cash Flow Hedges 
In designing our hedging approach, we consider several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge to reduce the volatility of our earnings and cash flows. 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 2, Summary of Significant Accounting Policies - Concentrations of Credit Risk, for further discussion on counterparty credit risk. 
We leverage foreign currency forward contracts and interest rate swaps to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates and to manage our interest rate exposure. We have designated and accounted for these derivatives as cash flow hedges with the unrealized gains or losses recorded in Accumulated Other Comprehensive Loss ("AOCL"), net of tax, in the Consolidated Balance Sheets. Realized gains or losses resulting from settlement of our forward contracts and swap agreements are subsequently reclassified into Selling, general and administrative ("SG&A") and Interest expense, net, respectively, in the Consolidated Statements of Income when the hedges are settled.
Foreign Currency Forward Contracts
As we conduct business outside the U.S. in several currencies, we are exposed to movements in foreign currency exchange rates. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. As of November 30, 2022, we maintained a series of foreign currency forward contracts to hedge a portion of our exposures related to our primary currencies of the British Pound Sterling, Euro, Indian Rupee and Philippine Peso. We entered into these contracts to mitigate our currency exposure ranging from 25% to 75%, over their respective hedged periods, which are set to mature at various points between the second quarter of fiscal 2023 through the first quarter of fiscal 2024.
The following table summarizes the gross notional value of foreign currency forward contracts to purchase British Pound Sterling, Euros, Indian Rupees and Philippine Pesos with U.S. dollars as of November 30, 2022 and August 31, 2022.
November 30, 2022August 31, 2022
(in thousands)Local Currency AmountNotional Contract Amount (USD)Local Currency AmountNotional Contract Amount (USD)
British Pound Sterling£48,000 $57,337 £44,200 $55,567 
Euro38,000 39,892 37,500 40,679 
Indian RupeeRs2,739,827 33,600 Rs2,667,928 33,600 
Philippine Peso1,540,066 27,300 1,462,060 27,000 
Total$158,129 $156,846 
Refer to Foreign Currency Transaction Risk in Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to foreign exchange rate fluctuations.
Interest Rate Swap Agreements
2020 Swap Agreement
On March 5, 2020, we entered into an interest rate swap agreement ("2020 Swap Agreement") with a notional amount of $287.5 million. The 2020 Swap Agreement hedged a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995% to mitigate our interest rate exposure. On March 1, 2022, we terminated the 2020 Swap Agreement, which resulted in a one-time benefit of $3.5 million recognized in Interest expense, net in the Consolidated Statements of Income during the third quarter of fiscal 2022, based on its fair market value.
2022 Swap Agreement
On March 1, 2022, we entered into an interest rate swap agreement ("2022 Swap Agreement") with a notional amount of $800.0 million to hedge a portion of our outstanding floating Secured Overnight Financing Rate ("SOFR") rate debt with a fixed
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interest rate of 1.162%. The notional amount of the 2022 Swap Agreement declines by $100.0 million on a quarterly basis as of May 31, 2022 and is maturing on February 28, 2024. As of November 30, 2022, the notional amount of the 2022 Swap Agreement was $500.0 million.
Refer to Note 11, Debt, for further discussion of our outstanding floating SOFR rate debt. Refer to Interest Rate Risk in Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to interest rate risk on our long-term debt outstanding.
Gross Notional Value and Fair Value of Derivative Instruments
The following is a summary of the gross notional values of the derivative instruments:

(in thousands)
Gross Notional Value
November 30, 2022August 31, 2022
Foreign currency forward contracts$158,129 $156,846 
Interest rate swap agreement500,000 600,000 
Total cash flow hedges$658,129 $756,846 

The following is a summary of the fair values of our derivative instruments:
Fair Value of Derivative Instruments
(in thousands)Derivative AssetsDerivative Liabilities
Derivatives designated as hedging instrumentsBalance Sheet ClassificationNovember 30, 2022August 31, 2022Balance Sheet ClassificationNovember 30, 2022August 31, 2022
Foreign currency forward contractsPrepaid expenses and other current assets$2,467 $ Accounts payable and accrued expenses$2,486 $8,307 
Interest rate swap agreementPrepaid expenses and other current assets12,162 10,621 Accounts payable and accrued expenses  
Other assets781 1,791 Other liabilities  
Total cash flow hedges$15,410 $12,412 $2,486 $8,307 

All derivatives were designated as hedging instruments as of November 30, 2022 and August 31, 2022.
Derivative Recognition
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended November 30, 2022 and November 30, 2021, respectively:
Gain (Loss) Recognized in AOCL on DerivativesLocation of Gain (Loss) Reclassified from AOCL into IncomeGain (Loss) Reclassified from AOCL into Income
(in thousands)November 30,November 30,
Derivatives in Cash Flow Hedging Relationships2022202120222021
Foreign currency forward contracts$3,323 $(3,542)SG&A$(4,965)$(449)
Interest rate swap agreement3,428 2,583 Interest expense, net2,897 (516)
Total cash flow hedges$6,751 $(959)$(2,068)$(965)

As of November 30, 2022, we estimate that net pre-tax derivative gains of $12.1 million included in AOCL will be reclassified into earnings within the next 12 months. As of November 30, 2022, our cash flow hedges were highly 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. There was no discontinuance of our
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cash flow hedges during the three months ended November 30, 2022 or November 30, 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. 
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 November 30, 2022 and August 31, 2022, there were no material amounts recorded net on the Consolidated Balance Sheets.
6. ACQUISITIONS
During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of CUSIP Global Services ("CGS") and Cobalt Software, Inc. ("Cobalt").
CUSIP Global Services

On March 1, 2022, we completed the acquisition of CGS for a cash purchase price of $1.932 billion, inclusive of working capital adjustments. CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS, operating on behalf of the American Bankers Association ("ABA"), is the provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States and as a substitute number agency for more than 35 other countries. We believe that the CGS acquisition will significantly expand our critical role in the global capital markets. The CGS 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 CGS acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation.
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(1)
$29,728 
Amortizable intangible assets
ABA business process1,583,000 36 yearsStraight-line
Client relationships164,000 26 yearsStraight-line
Acquired databases46,000 15 yearsStraight-line
Goodwill214,970 
Current liabilities(2)
(104,691)
Deferred revenues, long-term(1,481)
Total purchase price$1,931,526 
(1) Includes an accounts receivable balance of $29.5 million.
(2) Includes a deferred revenues balance of $99.4 million. The CGS acquisition was accounted for in accordance with our adoption of ASU No. 2021-08; as such, the deferred revenues did not include a fair value adjustment. Refer to Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Item 8. of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for more information on ASU No. 2021-08.
Goodwill totaling $215.0 million represents the excess of the CGS purchase price over the fair value of net assets acquired and considers future economic benefits that we expect to achieve as a result of the acquisition. The goodwill is included in the Americas segment and is deductible for income tax purposes. The majority of the net assets acquired relate to an ABA business process intangible which is a renewable license agreement with the ABA to manage the issuance, maintenance and access to the CUSIP numbering system and related database of CUSIP identifiers. This intangible asset's valuation and associated useful life considers the nature of the business relationship, multi-year term of the current agreement and the likelihood of long-term renewals. The useful life assigned to the Client relationships intangible asset considers the strong historical client retention and
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client renewals as a basis for expected future retention. The useful life assigned to Acquired databases considers the historical period of data collection and the limited changes to the data on an annual basis.
The results of CGS's operations have been included in our Consolidated Financial Statements, within the Americas, EMEA, and Asia Pacific segments, beginning with the closing of the acquisition on March 1, 2022. CGS functions as part of CTS. Pro forma information has not been presented because the effect of the CGS acquisition was not material to our Consolidated Financial Statements.
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, and inclusive of working capital adjustments. 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 finalized the purchase accounting for the Cobalt acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation.
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
Goodwill41,338 
Other assets34 
Current liabilities(4,437)
Other liabilities(7)
Total purchase price$50,018 
Goodwill totaling $41.3 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 useful life assigned to the Client relationships intangible asset considers the historical client retention as a basis for expected future retention. The useful life assigned to Software technology considers our historical experience and anticipated technological changes.
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 were not material to our Consolidated Financial Statements.
7. GOODWILL
Changes in the carrying amount of goodwill by segment for the three months ended November 30, 2022 are as follows:
(in thousands)
AmericasEMEA
Asia Pacific
Total
Balance at August 31, 2022$686,412 $277,087 $2,349 $965,848 
Foreign currency translations 8,984 14 8,998 
Balance at November 30, 2022$686,412 $286,071 $2,363 $974,846 

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
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during the fourth quarter of fiscal 2022 utilizing a qualitative analysis, consistent with the timing and methodology of previous years. We concluded it was more likely than not that the fair value of each of our segments was not less than its respective carrying value and no impairment charge was required.
8. INTANGIBLE ASSETS
We amortize intangible assets on a straight line basis over their estimated useful lives. The estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets are as follows:

November 30, 2022August 31, 2022
(in thousands, except useful lives)Estimated Useful Life (years)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
ABA business process
36
$1,583,000 $32,979 $1,550,021 $1,583,000 $21,986 $1,561,014 
Client relationships
8 to 26
264,742 59,313 205,429 263,163 55,405 207,758 
Software technology
5 to 9
123,584 100,609 22,975 122,363 96,567 25,796 
Developed technology
3 to 5
89,081 37,870 51,211 80,956 33,676 47,280 
Acquired databases
15
46,000 2,300 43,700 46,000 1,533 44,467 
Data content
5 to 20
33,389 26,153 7,236 32,305 24,973 7,332 
Trade names
15
6,751 4,340 2,411 6,693 4,431 2,262 
Total$2,146,547 $263,564 $1,882,983 $2,134,480 $238,571 $1,895,909 
The weighted average useful life of our intangible assets at November 30, 2022 was 32.8 years. As described in Note 6, Acquisitions, we acquired several intangible assets as part of the CGS acquisition. The weighted average useful life of our intangible assets at November 30, 2022, excluding those acquired from CGS, was 9.5 years. We assess intangible assets for indicators of impairment on a quarterly basis, including an evaluation of our useful lives to determine if events and circumstances warrant a revision to the remaining period of amortization. If indicators of impairment are present, amortizable intangible assets are tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows. We have not identified a material impairment nor a material change to the estimated remaining useful lives of our intangible assets for the three months ended November 30, 2022 and November 30, 2021. The intangible assets have no assigned residual values.
Amortization expense recorded for intangible assets for the three months ended November 30, 2022 and November 30, 2021 was $21.7 million and $10.1 million, respectively.
As of November 30, 2022, estimated intangible asset amortization expense for each of the next five years and thereafter are as follows:
Fiscal Year (in thousands)
Estimated Amortization Expense
2023 (remaining nine months)$69,398 
202482,708 
202576,216 
202667,546 
202762,783 
Thereafter1,524,332 
Total$1,882,983 
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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Income Tax Provision and Effective Tax Rate
The provision for income taxes and effective tax rate are as follows:
Three Months Ended
November 30,
(in thousands)20222021
Income before income taxes$157,885 $119,930 
Provision for income taxes$21,087 $12,283 
Effective tax rate13.4 %10.2 %
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. For the three months ended November 30, 2022, our effective tax rate is lower than the applicable U.S. corporate income tax rate mainly due to research and development ("R&D") tax credits, a foreign derived intangible income ("FDII") deduction and a tax benefit from the exercise of stock options.
For the three months ended November 30, 2022, the provision for income taxes was $21.1 million, compared with $12.3 million for the same period a year ago. The provision increased mainly due to higher pretax income at a higher effective tax rate and, to a lesser extent, an increase of the UK statutory tax rate.
10. LEASES
Our lease portfolio is primarily related to our office space, under various operating lease agreements. We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset. Our lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement (which includes fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term, leveraging an estimated IBR. Certain adjustments to calculate our lease ROU assets may be required due to prepayments, lease incentives received and initial direct costs incurred. We account for the lease and non-lease components as a single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense) in our Consolidated Statements of Income.
As of November 30, 2022, we recognized $154.1 million of Lease right-of-use assets, net and $230.9 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets. Such leases have a remaining lease term ranging from less than one year to just over 13 years and did not include any renewal or termination options that were not yet reasonably certain to be exercised.
The following table reconciles our future undiscounted cash flows related to our operating leases and the reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of November 30, 2022:
(in thousands)
Minimum Lease
Payments
Fiscal Years Ended August 31,
2023 (remaining nine months)$28,995 
202435,424 
202533,332 
202632,546 
202731,694 
Thereafter114,070 
Total $276,061 
Less: Imputed interest45,127 
Present value $230,934 
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The following table includes the components of our occupancy costs in our Consolidated Statements of Income:
Three Months Ended
November 30,
(in millions)
20222021
Operating lease cost(1)
$8.1 $10.5 
Variable lease cost(2)
$4.2 $