Years Ended August 31,

2015

2014

2013

Revenues
$ 1,006,768 $ 920,335 $ 858,112

Operating expenses

Cost of services
405,339 353,686 306,379
Selling, general and administrative
269,511 264,430 282,314

Total operating expenses
674,850 618,116 588,693

Operating income
331,918 302,219 269,419
Other income
1,836 1,245 1,491

Income before income taxes
333,754 303,464 270,910
Provision for income taxes
92,703 91,921 72,273

Net income
$ 241,051 $ 211,543 $ 198,637

Basic earnings per common share
$ 5.80 $ 4.98 $ 4.53
Diluted earnings per common share
$ 5.71 $ 4.92 $ 4.45

Weighted average common shares (Basic)
41,572 42,436 43,890
Weighted average common shares (Diluted)
42,235 42,970 44,624

	Years ended August 31,
(in thousands, except per share data)	2018			2017			2016
Revenues	$	1,350,145		$	1,221,179		$	1,127,092
Operating expenses
Cost of services		659,296			566,580			487,409
Selling, general and administrative		324,645			302,464			290,007
Total operating expenses		983,941			869,044			777,416

Operating income		366,204			352,135			349,676

Other (expense) income
(Loss) gain on sale of business		—			(1,223	)		112,453
Interest (expense), net of interest income		(14,366	)		(6,600	)		(1,136	)
Total other (expense) income		(14,366	)		(7,823	)		111,317

Income before income taxes		351,838			344,312			460,993

Provision for income taxes		84,753			86,053			122,178
Net income	$	267,085		$	258,259		$	338,815

Basic earnings per common share	$	6.90		$	6.55		$	8.29
Diluted earnings per common share	$	6.78		$	6.51		$	8.19

Basic weighted average common shares		38,733			39,444			40,880
Diluted weighted average common shares		39,377			39,642			41,365

The accompanying notes are an integral part of these consolidated financial statements.

FactSet Research Systems Inc.

Consolidated Statements of Comprehensive Income

~~(In thousands)~~

Years Ended August 31,	2015			2014		2013
									Years ended August 31,
(in thousands)									2018			2017		2016
Net income	$	241,051		$	211,543	$	198,637		$	267,085		$	258,259	$	338,815

Other comprehensive (loss) income, net of tax
Other comprehensive income (loss), net of tax
Net unrealized (loss) gain on cash flow hedges*		(868	)		5,357		(3,296	)		(7,288	)		5,017		(857	)
Foreign currency translation adjustments		(25,263	)		7,895		(5,151	)		(9,431	)		28,816		(23,644	)
Other comprehensive (loss) income		(26,131	)		13,252		(8,447	)		(16,719	)		33,833		(24,501	)

Comprehensive income	$	214,920		$	224,795	$	190,190		$	250,366		$	292,092	$	314,314

* The unrealized gain (loss) ~~gain~~ on cash flow hedges disclosed above was net of tax benefit (expense) of ~~$512,~~$3,518, ($~~3,193)~~3,049) and ~~$1,965~~$498 for the fiscal years ended August 31, ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

FactSet Research Systems Inc.

Consolidated Balance Sheets

~~(In thousands, except share data)~~

	August 31,
(in thousands, except share data)	2018			2017
ASSETS
Cash and cash equivalents	$	208,623		$	194,731
Investments		29,259			32,444
Accounts receivable, net of reserves of $3,490 and $2,738 at August 31, 2018 and 2017, respectively		156,639			148,331
Prepaid taxes		6,274			7,076
Deferred taxes		—			2,668
Prepaid expenses and other current assets		30,121			24,127
Total current assets		430,916			409,376

Property, equipment and leasehold improvements, net		100,545			100,454

Goodwill		701,833			707,560
Intangible assets, net		148,935			173,543
Deferred taxes		9,716			7,412
Other assets		27,502			14,970
TOTAL ASSETS	$	1,419,447		$	1,413,315

LIABILITIES
Accounts payable and accrued expenses	$	72,059		$	59,214
Accrued compensation		66,479			61,083
Deferred fees		49,700			47,495
Deferred taxes		—			2,382
Taxes payable		8,453			9,112
Dividends payable		24,443			21,853
Total current liabilities		221,134			201,139

Long-term debt		574,775			575,000
Deferred taxes		21,190			24,892
Deferred fees		7,833			3,921
Taxes payable		29,626			11,484
Deferred rent and other non-current liabilities		38,989			37,188
TOTAL LIABILITIES	$	893,547		$	853,624
Commitments and contingencies (See Note 19)

STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued	$	—		$	—
Common stock, $.01 par value, 150,000,000 shares authorized, 39,264,849 and 51,845,132 shares issued; 38,192,586 and 39,023,032 shares outstanding at August 31, 2018 and 2017, respectively		393			518
Additional paid-in capital		667,531			741,748
Treasury stock, at cost: 1,072,263 and 12,822,100 shares at August 31, 2018 and 2017, respectively		(213,428	)		(1,606,678	)
Retained earnings		122,843			1,458,823
Accumulated other comprehensive loss		(51,439	)		(34,720	)
TOTAL STOCKHOLDERS’ EQUITY	$	525,900		$	559,691

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,419,447		$	1,413,315

At August 31,

2015

2014

CURRENT ASSETS

Cash and cash equivalents
$ 158,914 $ 116,378
Investments
23,497 20,008
Accounts receivable, net of reserves of $1,580 and $1,662at August 31, 2015 and 2014, respectively
95,064 90,354
Prepaid taxes
4,808 6,532
Deferred taxes
2,105 1,841
Prepaid expenses and other current assets
19,786 14,662
Total current assets
304,174 249,775

LONG-TERM ASSETS

Property, equipment and leasehold improvements, at cost
213,279 201,713
Less accumulated depreciation and amortization
(154,015 ) (144,072 )
Property, equipment and leasehold improvements, net
59,264 57,641
Goodwill
308,287 285,608
Intangible assets, net
40,052 41,855
Deferred taxes
20,599 22,377
Other assets
4,295 5,956
TOTAL ASSETS
$ 736,671 $ 663,212

CURRENT LIABILITIES

Accounts payable and accrued expenses
$ 33,880 $ 26,971
Accrued compensation
44,916 42,481
Deferred fees
38,488 36,504
Deferred taxes
562 —
Taxes payable
3,755 5,036
Dividends payable
18,179 16,299
Total current liabilities
139,780 127,291

NON-CURRENT LIABILITIES

Long-term debt
35,000 —
Deferred taxes
1,697 2,921
Taxes payable
6,776 5,501
Deferred rent and other non-current liabilities
21,834 16,417
TOTAL LIABILITIES
$ 205,087 $ 152,130

Commitments and contingencies (See Note 18)

STOCKHOLDERS’ EQUITY

Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
$ — $ —
Common stock, $.01 par value, 150,000,000 shares authorized, 50,328,423 and 49,110,218 shares issued; 41,316,902 and 41,792,802 shares outstanding at August 31, 2015 and 2014, respectively
503 491
Additional paid-in capital
542,355 413,754
Treasury stock, at cost: 9,011,521 and 7,317,416 shares at August 31, 2015 and 2014, respectively
(988,873 ) (734,746 )
Retained earnings
1,021,651 849,504
Accumulated other comprehensive loss
(44,052 ) (17,921 )
TOTAL STOCKHOLDERS’ EQUITY
531,584 511,082
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 736,671 $ 663,212

The accompanying notes are an integral part of these consolidated financial statements.

FactSet Research Systems Inc.

Consolidated Statements of Cash Flows

~~(In thousands)~~

	Years ended August 31,
(in thousands)	2018			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	267,085		$	258,259		$	338,815
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		57,285			48,294			38,052
Stock-based compensation expense		31,516			34,183			29,793
Loss (gain) on sale of business		—			1,223			(112,453	)
Deferred income taxes		(1,910	)		4,879			4,528
Loss (gain) on sale of assets		140			59			8
Tax benefits from share-based payment arrangements		—			(10,331	)		(18,205	)
Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable, net of reserves		(8,417	)		(29,503	)		(3,541	)
Accounts payable and accrued expenses		12,077			(2,226	)		5,525
Accrued compensation		5,735			6,427			3,961
Deferred fees		6,035			(229	)		700
Taxes payable, net of prepaid taxes		27,659			7,877			30,270
Prepaid expenses and other assets		(11,224	)		(850	)		7
Deferred rent and other non-current liabilities		(465	)		2,331			13,674
Other working capital accounts, net		152			132			6
Net cash provided by operating activities		385,668			320,527			331,140

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses and investments, net of cash and cash equivalents acquired		(15,000	)		(303,086	)		(262,909	)
Proceeds from sale of business, net		—			—			153,137
Purchases of investments		(12,470	)		(30,757	)		(18,137	)
Proceeds from sales of investments		12,459			23,399			17,241
Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions		(33,520	)		(36,862	)		(47,740	)
Net cash used in investing activities		(48,531	)		(347,306	)		(158,408	)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments		(89,408	)		(80,898	)		(74,218	)
Repurchase of common stock		(303,955	)		(260,978	)		(356,828	)
Proceeds from debt		—			640,000			265,000
Repayment of debt		—			(365,000	)		—
Debt issuance costs		—			(438	)		(12	)
Proceeds from employee stock plans		71,610			50,045			56,851
Tax benefits from share-based payment arrangements		—			10,331			18,205
Other financing activities		1,716			(1,223	)		—
Net cash used in financing activities		(320,037	)		(8,161	)		(91,002	)

Effect of exchange rate changes on cash and cash equivalents		(3,208	)		1,264			(12,237	)
Net increase (decrease) in cash and cash equivalents		13,892			(33,676	)		69,493
Cash and cash equivalents at beginning of period		194,731			228,407			158,914
Cash and cash equivalents at end of period	$	208,623		$	194,731		$	228,407

Supplemental Disclosure of Cash Flow Information
Cash paid during the year for interest	$	15,676		$	8,466		$	3,010
Cash paid during the year for income taxes, net of refunds	$	68,707		$	74,788		$	87,513

Supplemental Disclosure of Non-Cash Transactions
Dividends declared, not paid	$	24,443		$	21,853		$	20,019

The accompanying notes are an integral part of these consolidated financial statements.

Years Ended August 31,

2015

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES

Net income
$ 241,051 $ 211,543 $ 198,637
Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization
31,349 34,435 35,779
Stock-based compensation expense
26,371 22,891 39,951
Deferred income taxes
(969
)
(1,028
)
3,175
Gain on sale of assets
(34
)
(62
)
(26
)
Tax benefits from share-based payment arrangements
(28,948
)
(11,955
)
(25,225
)
Changes in assets and liabilities, net of effects of acquisitions

Accounts receivable, net of reserves
(4,300
)
(13,299
)
859
Accounts payable and accrued expenses
8,123 (2,903
)
3,355
Accrued compensation
3,516 1,953 (776
)
Deferred fees
53 3,594 (1,107
)
Taxes payable, net of prepaid taxes
30,437 23,309 13,498
Prepaid expenses and other assets
(4,523
)
(1,535
)
2,105
Deferred rent and other non-current liabilities
4,322 (1,672
)
(2,846
)
Other working capital accounts, net
(6
)
(248
)
2,430

Net cash provided by operating activities
306,442 265,023 269,809

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of businesses, net of cash acquired
(34,758
)
(46,873
)
(705
)
Purchases of investments
(24,264
)
(20,415
)
(15,613
)
Proceeds from sales of investments
19,827 14,323 14,423
Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions
(25,682
)
(17,743
)
(18,517
)

Net cash used in investing activities
(64,877
)
(70,708
)
(20,412
)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend payments
(66,551
)
(61,007
)
(56,002
)
Repurchase of common stock
(256,217
)
(279,829
)
(332,168
)
Proceeds from debt
35,000 — —
Debt issuance costs
(32
)
— —
Proceeds from employee stock plans
71,526 52,152 124,537
Tax benefits from share-based payment arrangements
28,948 11,955 25,225

Net cash used in financing activities
(187,326
)
(276,729
)
(238,408
)

Effect of exchange rate changes on cash and cash equivalents
(11,703
)
2,165 (3,406
)
Net increase (decrease) in cash and cash equivalents
42,536 (80,249
)
7,583
Cash and cash equivalents at beginning of year
116,378 196,627 189,044

Cash and cash equivalents at end of year
$ 158,914 $ 116,378 $ 196,627

Supplemental Disclosure of Cash Flow Information

Cash paid during the year for income taxes, net of refunds
$ 64,750 $ 67,152 $ 53,153

Supplemental Disclosure of Non-Cash Transactions

Dividends declared, not paid
$ 18,179 $ 16,299 $ 15,164
Stock issued for acquisition of business
$ 2,991 $ — $ —

FactSet Research Systems Inc.

Consolidated Statements of Changes in Stockholders’ Equity

	Years ended August 31,
(in thousands)	2018			2017			2016
COMMON STOCK
Balance, beginning of year	$	518		$	512		$	503
Common stock issued for employee stock plans		8			6			9
Retirement of Treasury shares		(133	)		—			—
Balance, end of year	$	393		$	518		$	512

ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year	$	741,748		$	623,195		$	542,355
Common stock issued for employee stock plans		80,983			50,039			57,784
Retirement of Treasury shares		(186,717	)		—			—
Stock-based compensation expense		31,517			34,183			29,793
Tax benefits from share-based payment arrangements		—			10,331			18,205
Accelerated share repurchase		—			24,000			(24,000	)
Stock-based compensation adjustment associated with disposition		—			—			(942	)
Balance, end of year	$	667,531		$	741,748		$	623,195

TREASURY STOCK
Balance, beginning of year	$	(1,606,678	)	$	(1,321,700	)	$	(988,873	)
Repurchases of common stock		(302,441	)		(253,131	)		(328,283	)
Retirement of Treasury shares		1,697,205			—			—
Accelerated share repurchase		—			(24,000	)		—
Purchases of common stock upon restricted stock vesting		(1,514	)		(7,847	)		(4,544	)
Balance, end of year	$	(213,428	)	$	(1,606,678	)	$	(1,321,700	)

RETAINED EARNINGS
Balance, beginning of year	$	1,458,823		$	1,283,927		$	1,021,651
Net income		267,085			258,259			338,815
Dividends		(92,710	)		(83,363	)		(76,539	)
Retirement of Treasury Stock		(1,510,355	)		—			—
Balance, end of year	$	122,843		$	1,458,823		$	1,283,927

ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of year	$	(34,720	)	$	(68,553	)	$	(44,052	)
Foreign currency translation adjustments		(9,431	)		28,816			(23,644	)
Net unrealized (loss) gain on cash flow hedges, net of tax		(7,288	)		5,017			(857	)
Balance, end of year	$	(51,439	)	$	(34,720	)	$	(68,553	)

TOTAL STOCKHOLDERS’ EQUITY
Balance, beginning of year	$	559,691		$	517,381		$	531,584
Net income		267,085			258,259			338,815
Common stock issued for employee stock plans		80,992			50,045			57,793
Purchases of common stock upon restricted stock vesting		(1,514	)		(7,847	)		(4,544	)
Stock-based compensation expense		31,516			34,183			29,793
Tax benefits from share-based payment arrangements		—			10,331			18,205
Repurchases of common stock		(302,441	)		(253,131	)		(352,283	)
Foreign currency translation adjustments		(9,431	)		28,816			(23,644	)
Stock-based compensation adjustment associated with disposition		—			—			(942	)
Net unrealized (loss) gain on cash flow hedges, net of tax		(7,288	)		5,017			(857	)
Dividends		(92,710	)		(83,363	)		(76,539	)
Balance, end of year	$	525,900		$	559,691		$	517,381

The accompanying notes are an integral part of these consolidated financial statements.

~~Consolidated Statements of Changes in Stockholders’ Equity~~

~~(In thousands)~~

Years Ended August 31,

2015

2014

2013

COMMON STOCK

Balance, beginning of year
$ 491 $ 481 $ 456
Common stock issued for employee stock plans
12 10 25
Balance, end of year
$ 503 $ 491 $ 481

ADDITIONAL PAID-IN CAPITAL

Balance, beginning of year
$ 413,754 $ 326,869 $ 137,569
Common stock issued for employee stock plans
72,381 52,039 124,124
Stock-based compensation expense
26,371 22,891 39,951
Tax benefits from share-based payment arrangements
28,948 11,955 25,225
Stock issued for acquisition of business
901 — —
Balance, end of year
$ 542,355 $ 413,754 $ 326,869

TREASURY STOCK

Balance, beginning of year
$ (734,746
)
$ (454,917
)
$ (122,749
)
Repurchases of common stock
(253,076
)
(275,415
)
(327,454
)
Stock issued for acquisition of business
2,090 — —
Purchases of common stock upon restricted stock vesting
(3,141
)
(4,414
)
(4,714
)
Balance, end of year
$ (988,873
)
$ (734,746
)
$ (454,917
)

RETAINED EARNINGS

Balance, beginning of year
$ 849,504 $ 700,519 $ 559,714
Net income
241,051 211,543 198,637
Dividends
(68,904
)
(62,558
)
(57,832
)
Retirement of treasury stock
— — —

Balance, end of year
$ 1,021,651 $ 849,504 $ 700,519

ACCUMULATED OTHER COMPREHENSIVELOSS

Balance, beginning of year
$ (17,921
)
$ (31,173
)
$ (22,726
)
Foreign currency translation adjustments
(25,263
)
7,895 (5,151
)
Net unrealized (loss) gain on cash flow hedges, net of tax
(868
)
5,357 (3,296
)
Balance, end of year
$ (44,052
)
$ (17,921
)
$ (31,173
)

TOTAL STOCKHOLDERS’ EQUITY

Balance, beginning of year
$ 511,082 $ 541,779 $ 552,264
Net income
241,051 211,543 198,637
Common stock issued for employee stock plans
72,393 52,049 124,149
Purchases of common stock upon restricted stock vesting
(3,141
)
(4,414
)
(4,714
)
Stock-based compensation expense
26,371 22,891 39,951
Tax benefits from share-based payment arrangements
28,948 11,955 25,225
Repurchases of common stock
(253,076
)
(275,415
)
(327,454
)
Foreign currency translation adjustments
(25,263
)
7,895 (5,151
)
Stock issued for acquisition of business
2,991 — —
Net unrealized (loss) gain on cash flow hedges, net of tax
(868
)
5,357 (3,296
)
Dividends
(68,904
)
(62,558
)
(57,832
)
Balance, end of year
$ 531,584 $ 511,082 $ 541,779

~~The accompanying notes are an integral part of these consolidated financial statements.~~

Notes to the Consolidated Financial Statements

1. ORGANIZATION AND NATURE OF BUSINESS

FactSet Research Systems Inc. (the “Company” or “FactSet”) is a global provider of integrated financial information, ~~and~~ analytical applications toand industry-leading service for the global investment community. ~~FactSet combines~~The Company delivers insight and information to investment professionals through its analytics, service, content, ~~regarding companies~~ and securities from major markets all over the globe into a single online platform of information and analytics. By consolidating content from hundreds of databases with powerful analytics, FactSet supports the investment process from initial research to published results for buy and sell-side professionals.technology. These professionals include portfolio managers, ~~research and performance analysts, risk managers, marketing professionals, sell-side equity~~investment research professionals, investment bankers, risk and ~~fixed income professionals.~~performance analysts, and wealth advisors. From streaming real-time data to historical information, including quotes, estimates, news and commentary, FactSet offers proprietary and third-party content through desktop, web, mobile, and off-platform solutions. The Company’s ~~applications provide users access to~~broad application suite offers tools and resources including company and industry analyses, ~~multicompany comparisons, company~~full screening tools, portfolio analysis, ~~predictive~~ risk ~~measurements, alphatesting,~~profiles, alpha-testing, portfolio optimization and ~~simulation, real-time news~~research management solutions. With recent acquisitions, FactSet has continued to expand its solutions across the investment lifecycle from idea generation to performance and ~~quotes and tools to value and analyze fixed income securities and portfolios. WithMicrosoft~~^® ~~Office integration, wireless access and customizable options, FactSet offers a complete financial workflow solution.~~client reporting. The Company’s revenues are primarily derived from subscriptions to products and services such as workstations, ~~content~~analytics, enterprise data, research management, and ~~applications.~~trade execution.

2.BASIS OF PRESENTATION

FactSet conducts business globally and is managed on a geographic basis. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany activity and balances have been eliminated from the consolidated financial statements. ~~The Company has evaluated subsequent events through the date that the financial statements were issued.~~

The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting ~~principles.~~principles (“GAAP”). The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the U.S. 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 amounts of revenues and expenses during the reporting period. Significant estimates have been made in areas that include allocation of purchase price to acquired assets and liabilities, stock-based compensation, income taxes, accrued compensation, valuation of goodwill, and useful lives and valuation of fixed and intangible assets. The Company bases its 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.The Company has evaluated subsequent events through the date that the financial statements were issued.

3. SUMMARY OF SIGNIFICANTACCOUNTING POLICIES

The significant accounting policies of the Company and its subsidiaries are summarized below.

Revenue Recognition

The majority of the Company’s revenues are derived from ~~month-to-month~~ subscriptions to services such as workstations (also referred to as users), content and applications. The majority of clients are invoiced monthly to reflect the actual services provided. The remaining clients are invoiced quarterly, annually or biannually in advance. Subscription revenue is earned each month as the service is rendered to clients on a monthly basis. FactSet recognizes revenue when the client subscribes to FactSet services, the service has been rendered and earned during the month, the amount of the subscription is fixed or determinable based on established rates quoted on an annualized basis and collectability is reasonably assured. A provision for billing adjustments and cancellation of services is estimated and accounted for as a reduction to revenue, with a corresponding reduction to accounts receivable.

Accounts Receivable and Deferred Fees

Amounts that have been earned but not yet paid are reflected on the Consolidated Balance Sheets as ~~accounts~~Accounts receivable, net of reserves. Amounts invoiced in advance orof client payments that are in excess of earned subscription ~~revenues~~revenue are reflected on the Consolidated Balance ~~Sheets~~Sheet as ~~deferred~~Deferred fees. As of August 31, ~~2015,~~2018, the amount of accounts receivable that was unbilled totaled ~~$4.0~~$6.4 million, which was subsequently billed in fiscal ~~2016.~~2019.

The Company calculates its receivable reserve through analyzing aged client receivables, reviewing the recent history of client receivable write-offs and understanding general market and economic conditions. In accordance with this policy, a receivable reserve of ~~$1.6~~$3.5 million and ~~$1.7~~$2.7 million was recorded as of August 31, ~~2015~~2018 and ~~2014,~~2017, respectively, inwithin the Consolidated Balance Sheets as a reduction to ~~accounts~~Accounts receivable.

Cost of Services

Cost of services is comprised of compensation for Company employees within the content collection, consulting, product development, software and systems engineering groups in addition to data costs, computer maintenance and depreciation expenses, amortization of identifiable intangible assets, and client-related communication costs.

Selling, General and Administrative

Selling, general and administrative expenses include compensation for the sales and various other support and administrative departments in addition to travel and entertainment expenses, marketing costs, rent, amortization of leasehold improvements, depreciation of furniture and fixtures, office expenses, professional fees and other miscellaneous expenses.

Research and Product Development Costs

FactSet does not have a separate research and product development department, but rather the Product Development and Engineering departments work closely with our strategists, product managers, sales and other client-facing specialists to identify areas of improvement with the goal of providing increased value to clients. As such, research and product development costs relate to the salary and benefits for the Company’s product development, software engineering and technical support staff and, as such, these costs are expensed when incurred within cost of services as employee compensation. The Company expects to allocate a similar percentage of its workforce in future years in order to continue to develop new products and enhancements, respond quickly to market changes and meet the needs of its clients efficiently. FactSet incurred $217.1 million of research and product development costs during fiscal 2018, which was comparable to its spend on similar development during fiscal years 2017 and 2016 respectively.

Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted ~~earnings per share~~EPS is computed by dividing net income by the number of weighted average common shares outstanding during the period increased by the dilutive effect of potential common shares outstanding during the period. The number of potential common shares outstanding has been determined in accordance with the treasury stock method to the extent they are dilutive. ~~Common share equivalents consist~~For the purpose of calculating EPS, common shares outstanding include common shares issuable upon the exercise of outstanding share-based compensation awards, including employee stock options and restricted stock. Under the treasury stock method, the exercise price paid by the optionee and future stock-based compensation expense that the Company has not yet recognized ~~and the amount of tax benefits that would be recorded in additional paid-in capital (“APIC”) when the award becomes deductible~~ are assumed to be used to repurchase shares.

Comprehensive Income (Loss)

The Company discloses comprehensive income (loss) in accordance with applicable standards for the reporting and display of comprehensive income (loss) in a set of financial statements. Comprehensive income (loss) is defined as the change in net assets of a business enterprise during a period from transactions generated from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

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. The Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s cash equivalents are classified as Level 1 while the Company’s derivative instruments (foreign exchange forward contracts) and certificates of deposit are classified as Level 2. There were no Level 3 assets or liabilities held by FactSet as of August 31, ~~2015~~2018 or ~~2014.~~2017.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and ~~corporate~~ money market funds with original maturities of three months or less and are reported at fair value. The Company’s corporate money market funds are ~~traded in an active market~~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.

Investments

Investments consist of both mutual funds and certificates of ~~deposits with~~deposit as both are part of the Company’s investment strategy. These mutual funds and certificates of deposit are included as Investments (short-term) on the Company’s Consolidated Balance Sheets as the certificates of deposit have original maturities greater than three months, but less than one year and ~~as such, are classified as investments (short-term) on~~ the ~~Consolidated Balance Sheets. These~~mutual funds can be liquidated at that Company’s discretion. The mutual funds and certificates of deposit are held for investment and are not considered debt securities. ~~The Company’s investments are associated with its purchase of certificates of deposits in India with maturities of less than twelve months from the date of purchase.~~ Interest income earned from ~~the certificates of deposit~~these investments during fiscal ~~2015, 2014~~2018, 2017 and ~~2013~~2016 were ~~$2.0~~$1.3 million, ~~$1.2~~$1.6 million and ~~$1.3~~$1.6 million, respectively. The Company’s cash, cash equivalents and investments portfolio did not experience any realized or unrealized losses as a result of counterparty credit risk or ratings change during fiscal ~~2015~~2018 and ~~2014.~~2017.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Computers and related equipment are depreciated on a straight-line basis over estimated useful lives of three years. Furniture and fixtures are depreciated on a straight-line basis over their estimated useful lives of seven years. Leasehold improvements are amortized on a straight-line basis over the terms of the related leases or estimated useful lives of the improvements, whichever period is shorter. Repairs and maintenance expenditures, which are not considered leasehold improvements and do not extend the useful life of the property and equipment, are expensed as incurred.

The Company performs a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable. Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value is required. Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.

Goodwill

Goodwill has resulted from the acquisitions of the Insyte, LionShares, Mergerstat, CallStreet, JCF, TrueCourse, Derivative Solutions, AlphaMetrics, Global Filings, DealMaven, Thomson Fundamentals, Market Metrics, StreetAccount, Revere, Matrix, ETF.com and Code Red businesses. Goodwill resulting from the acquisitions of LionShares, Mergerstat, TrueCourse, Derivative Solutions, Market Metrics, StreetAccount, Revere and Matrix are income tax-deductible based on the structure of the acquisition. The Company is required to test goodwill at the reporting level for potential impairment annually, or more frequently if impairment indicators occur. Goodwill is tested for impairment based on the present value of discounted cash flows, and, if impaired, written down to fair value based on discounted cash flows. FactSet has three reporting units, which are consistent with the operating segments reported as there is no discrete financial information available for the subsidiaries within each operating segment. The reporting units evaluated for potential impairment were the U.S., Europe and Asia Pacific, which reflect the level of internal reporting the Company uses to manage its business and operations. The Company performed its annual goodwill impairment test during the fourth quarter of fiscal ~~2015,~~2018, consistent with the timing of previous years, ~~at which time it was determined~~and concluded that there ~~were~~was no ~~indications of~~ impairment, with the fair value of each of the Company’s reporting units significantly exceeding carrying value.

Intangible Assets

FactSet’s identifiable intangible assets consist of acquired content databases, client relationships, software technology, non-compete agreements and trade names resulting from previous acquisitions, which have been fully integrated into the Company’s operations. ~~Depending on the nature of the intangible asset, the identifiable~~The Company amortizes intangible assets ~~are amortized on either a straight-line or an accelerated basis using~~over their estimated useful lives, ~~ranging between two and twenty years. The remaining useful lives of intangible assets subject to amortization~~which are evaluated quarterly to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. ~~These intangible assets have no assigned residual values.~~Amortizable Intangible assets are ~~reviewed~~tested for impairment, ~~whenever events or changes in circumstances indicate that the carrying amount~~if indicators of ~~such assets may not be recoverable. Determination of recoverability is~~impairment are present, based on ~~an estimate of~~ undiscounted ~~future~~ cash flows, ~~resulting from the use of the asset~~ and, ~~its eventual disposition. Measurement of any impairment loss for intangible assets that management expects~~if impaired, written down to ~~hold and use is~~fair value based on ~~the amount the carrying value exceeds the fair value of the asset.~~discounted cash flows. No impairment of intangible assets has been identified during any of the fiscal years presented. The intangible assets have no assigned residual values.

Accrued Liabilities

Accrued liabilities include estimates relating to employee compensation, operating expenses and tax liabilities. ~~Approximately 15%~~Annual cash-based awards that are variable and discretionary in nature represent approximately 10% of ~~the~~our Company’s employee incentive compensation ~~programs are discretionary.~~program. At the end of each fiscal year, FactSet conducts a final review of both Company and individual performance within each department to determine the amount of discretionary employee compensation. The Company also reviews compensation throughout the year to determine how overall performance tracks against management’s expectations. Management takes these and other factors, including historical performance, into account in reviewing accrued compensation estimates quarterly and adjusting accrual rates as appropriate. The amount of the variable employee compensation recorded within accrued compensation as of August 31, ~~2015~~2018 and ~~2014,~~2017, was ~~$38.6~~$43.6 million and ~~$37.3~~$39.2 million, respectively. During fiscal 2018 the Company incurred $17.4 million of restructuring charges primarily related to employee compensation and severance of which $5.6 million was recorded as Accrued compensation as of August 31, 2018 which will be paid during fiscal 2019.

Derivative Instruments

~~Derivative Instruments~~

FactSet conducts business outside the U.S. in several currencies including the ~~Indian Rupee, Philippine Peso,~~ British Pound Sterling, Euro, Indian Rupee, Japanese Yen and ~~Japanese Yen.~~Philippine Peso. As such, itthe Company is exposed to movements in foreign currency exchange rates compared to the U.S. dollar. The Company utilizes derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. The Company does not enter into foreign exchange forward contracts for trading or speculative purposes. In designing a specific hedging approach, FactSet considers several factors, including offsetting exposures, significance of exposures, forecasting risk and potential effectiveness of the hedge. These transactions are designated and accounted for as cash flow hedges in accordance with applicable accounting ~~guidance~~.guidance. 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 hedged exposure affects earnings. The gains and losses on foreign currency forward contracts mitigate the variability in operating expenses associated with currency movements. All derivatives are assessed for effectiveness at each reporting period.

Foreign Currency Translation

Certain ~~wholly owned~~wholly-owned subsidiaries within the European and Asia Pacific segments operate under a functional currency different from the U.S. dollar, such as the British Pound Sterling, Euro, Indian Rupee, Japanese Yen ~~Indian Rupee~~ and Philippine Peso. The financial statements of these foreign subsidiaries are translated into U.S. dollars using period-end rates of exchange for assets and liabilities, and average rates for the period for revenues and expenses. Translation gains and losses that arise from translating assets, liabilities, revenues and expenses of foreign operations are recorded in AOCL as a component of stockholders’ equity. The accumulated foreign currency translation loss totaled ~~$43.7~~$48.0 million and ~~$18.4~~$38.5 million at August 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

Income and Deferred Taxes

Income tax expense is based on taxable income determined in accordance with ~~currently~~current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using ~~currently~~current enacted tax rates. FactSet recognizes the financial effect of an income tax position only if it is more likely than not (greater than 50%) that the tax position will prevail upon tax examination, based solely on the technical merits of the tax position as of the reporting date. Otherwise, no benefit or expense can be recognized in the consolidated financial statements. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, FactSet accrues interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest is classified as income tax expense in the financial statements. As of August 31, ~~2015,~~2018, the Company had gross unrecognized tax benefits totaling ~~$6.8~~$9.2 million, including ~~$1.3~~$1.1 million of accrued interest, recorded as ~~non-current taxes~~Taxes payable in(non-current) on the Consolidated Balance Sheet.

Stock-Based Compensation

Accounting guidance requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including stock options, restricted stock and common shares acquired under employee stock purchases based on estimated fair values of the share awards that are scheduled to vest during the period. FactSet uses the straight-line attribution method for all awards with graded vesting features and service conditions only. Under this method, the amount of compensation expense that is recognized on any date is at least equal to the vested portion of the award on that date. For all stock-based awards with performance conditions, the graded vesting attribution method is used by the Company to determine the monthly stock-based compensation expense over the applicable vesting periods.

As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based primarily on historical experience. Windfall tax benefits, defined as tax deductions that exceed recorded stock-based compensation, are classified as cash inflows from financing activities.

Performance-based stock options require management to make assumptions regarding the likelihood of achieving Company performance targets on a quarterly ~~basis.The~~basis. The number of performance-based options that vest will be predicated on the Company achieving certain performance levels. A change in the financial performance levels the Company achieves could result in changes to FactSet’s current estimate of the vesting percentage and related stock-based compensation.

Treasury Stock

The Company accounts for repurchased common stock under the cost method and includes such treasury stock as a component of its stockholders’ equity. AtThe Company accounts for the ~~time~~formal retirement of treasury stock ~~retirement is approved~~ by ~~FactSet’s Board of Directors, the Company’s accounting policy is to deduct~~deducting its par value from common stock, ~~reduce APIC~~reducing additional paid-in capital (“APIC”) by the average amount recorded in APIC when the stock was originally issued and any remaining excess of cost ~~as a deduction~~deducted from retained earnings.

Operating Leases

The Company conducts all of its operations in leased facilities which have minimum lease obligations under non-cancelable operating leases. Certain of these leases contain rent escalations based on specified percentages. Most of the leases contain renewal options and require payments for taxes, insurance and maintenance. Rent expense is charged to operations as incurred except for escalating rents, which are charged to operations on a straight-line basis over the life of the ~~lease.Lease~~lease. Lease incentives, relating to allowances provided by landlords, are amortized over the term of the lease as a reduction of rent expense. Costs associated with acquiring a subtenant, including broker commissions and tenant allowances, are amortized over the sublease term as a reduction of sublease income.

Business Combinations

The Company records acquisitions using the purchase method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recognized at their fair value on the acquisition date. The application of the purchase method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between assets that are depreciated and amortized from goodwill. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses and restructuring costs are recognized separately from the business combination and are expensed as incurred.

Concentrations of Risk

Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties.

New Accounting Standards or Updates Recently Adopted

~~Except for~~As of the beginning of fiscal 2018, FactSet implemented all applicable new accounting ~~standard updates disclosed below, the new~~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 last three fiscal years that had a material impact on the consolidated financial statements.

Balance Sheet Classification of Deferred Taxes

During the first quarter of fiscal 2018, FactSet adopted the accounting standard update issued by the FASB in November 2015, to simplify the presentation of deferred taxes on the balance sheet. This accounting standard update required an entity to present all deferred tax assets and deferred tax liabilities as non-current on the balance sheet. Under the previous guidance, entities were required to separately present deferred taxes as current or non-current. Netting deferred tax assets and deferred tax liabilities by tax jurisdiction is still required under the new guidance. This accounting standard update is a change to the balance sheet presentation only. The changes have been applied prospectively as permitted by the standard and prior periods have not been restated.

Share-Based Payments

During the first quarter of fiscal 2018, FactSet adopted the accounting standard update issued by the FASB in March 2016, which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. This accounting standard update increases the volatility within the Company’s provision for income taxes, as all excess tax benefits or deficiencies related to share-based payments that were previously reported within equity will now be recognized in the consolidated statement of income. The adoption of this standard resulted in the recognition of $9.5 million of excess tax benefits to FactSet’s provision for income taxes during fiscal 2018. In addition, this standard changed the classification of excess tax benefits presented in the Company’s consolidated statements of cash flows from a financing activity to an operating activity, which was applied on a prospective basis as permitted by the standard. Prior periods were not restated. Share-based payment expense continues to reflect estimated forfeitures of share-based payment awards. The remaining provisions of this standard did not have ana material impact on the Company’s consolidated financial statements.

~~Reporting~~

Income Taxes

During the third quarter of ~~Amounts Reclassified out of Accumulated Other Comprehensive Income~~

~~In February 2013,~~fiscal 2018, FactSet adopted the ~~FASB issued an~~ accounting standard update issued by the FASB in March 2018, which provides guidance related to ~~require reclassification adjustments from other comprehensive~~ income ~~to be presented either~~tax accounting implications under the Tax Cuts and Jobs Act (“TCJA”) enacted on December 22, 2017, effective January 1, 2018. Areas of clarification under the update are the measurement period timeframe, changes in ~~the financial statements or in the notes~~subsequent reporting periods, and reporting requirements as they relate to the ~~financial statements. This accounting~~TCJA. Due to the complexity of the TCJA, the standard update ~~became effective for~~allows companies to record provisional amounts, or reasonable estimates of the tax effects of the TCJA during a measurement period not to exceed one year from the enactment date. As a result of the TCJA, FactSet ~~beginning in the first quarter~~recorded a one-time transition tax expense of ~~fiscal 2014~~$23.2 million and ~~the additional information has been disclosed in Note 6,~~~~Other Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss~~.

~~Cumulative Translation Adjustments~~

~~In March 2013, the FASB issued an accounting standard update requiring an entity to release into net income the entire amount of~~ a ~~cumulative translation adjustment~~$2.3 million tax expense related to ~~its investment~~the remeasurement of the net U.S. deferred tax position. The Company will continue to analyze the TCJA and related accounting guidance and interpretation in ~~a foreign entity when as a parent it either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets~~order to finalize any impacts within ~~a foreign entity. This accounting standard update was adopted by FactSet beginning in~~ the ~~first quarter of fiscal 2014 and did not have an impact on~~one-year measurement period from the ~~Company’s consolidated financial statements.~~TCJA enactment date.

Recent Accounting Standards or Updates Not Yet Effective

~~Reporting Discontinued Operations~~Revenue Recognition

In ~~April~~May 2014 and July 2015, the FASB issued an accounting standard update that changes the criteria for reporting discontinued operations. Under the accounting standard update, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results when either it qualifies as held for sale, disposed of by sale, or disposed of other than by sale. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal 2016.The Company does not believe this new accounting standard update will have a material impact on its consolidated financial statements.

~~Revenue Recognition~~

~~In May 2014, the FASB issued an accounting standard update~~updates which ~~provides~~ clarified principles for recognizing revenue arising from contracts with clients and ~~supersedes~~superseded most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ~~In applying~~The new guidance also requires increased disclosures including the ~~revenue model~~nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with clients.

The standard allows two methods of adoption: i) retrospectively to each prior period presented (“full retrospective method”), or ii) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). FactSet will adopt the new standard using the modified retrospective method at the beginning of its first quarter of fiscal 2019.

FactSet’s implementation efforts include the identification of revenue within the scope of the standard and an evaluation of contract revenue under the new guidance. Additionally, an assessment of the qualitative and quantitative impacts of pricing changes during the contractual term and fulfillment costs was made.

Services and products offered by FactSet mostly result in the customer simultaneously receiving and consuming the benefits. Thus, FactSet will be required to record revenue for its ~~scope,~~contracts using the over-time revenue recognition model which is comparable with how revenue is recognized today. The Company anticipates the new standard will impact the Company's accounting for certain fulfillment costs, which include up-front costs to allow for the delivery of services and products that are expected to be recovered. Under the new standard, such up-front costs would be recognized as an asset and amortized consistent with the associated revenue for providing the services. Currently, these costs are expensed as incurred. The Company does not expect the adoption of the new revenue recognition standard to result in a material change to its consolidated financial statements.

Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued an accounting standard update to amend its current guidance on the classification and measurement of certain financial instruments. The accounting standard update significantly revises an entity’s accounting related to the presentation of certain fair value changes for financial liabilities measured at fair value. This guidance also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance will be effective for FactSet beginning in the first quarter of fiscal 2019. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Leases

In February 2016, the FASB issued an accounting standard update related to accounting for leases. The guidance introduces a lessee model that requires most leases to be reported on the balance sheet. The accounting standard update aligns many of the underlying principles of the new lessor model with those in the FASB’s new revenue recognition standard. The guidance also eliminates the requirement in current GAAP for an entity to use bright-line tests in determining lease classification. This accounting standard update will ~~identify the contract with a client, identify the performance obligations~~be effective for FactSet beginning in the ~~contract, determine~~first quarter of fiscal 2020, with early adoption in fiscal 2019 permitted. The Company is currently evaluating the ~~transaction price, allocate~~impact of this accounting standard update, including the ~~transaction price~~transition method, but does expect the adoption to have a material impact to its balance sheet. However, it does not expect the adoption to have a material impact on the statements of income, comprehensive income or cash flows. See Note 19 for information regarding our undiscounted future lease commitments.

Cash Flow Simplification

In August 2016, the FASB issued an accounting standard update which simplifies how certain transactions are classified in the statement of cash flows. This includes revised guidance on the cash flow classification of debt prepayments and debt extinguishment costs, contingent consideration payments made after a business combination and distributions received from equity method investments. The guidance is intended to reduce diversity in practice across all industries. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal 2019. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Income Taxes on Intra-Entity Transfers of Assets

In October 2016, the FASB issued an accounting standard update, which removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The guidance is intended to reduce diversity in practice related to the ~~performance obligations~~tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. This accounting standard update will be effective for FactSet beginning in the ~~contract~~first quarter of fiscal 2019. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Goodwill Impairment Test

In January 2017, the FASB issued an accounting standard update which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal 2021, with early adoption permitted for any impairment tests performed after January 1, 2017 and ~~recognize revenue when (or as)~~is not expected to have a material impact on the Company.

Hedge Accounting Simplification

In August 2017, the FASB issued an accounting standard update to reduce the complexity of and simplify the application of hedging accounting. The guidance refines and expands hedge accounting for both financial and nonfinancial risk components, eliminates the need to separately measure and report hedge ineffectiveness, and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This guidance will be effective for FactSet beginning in the first quarter of fiscal 2020, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update but is not expected to have a material impact on the consolidated financial statements.

Share-Based Payments

In May 2017, the FASB issued an accounting standard update, which amends the scope of modification accounting for share-based payment arrangements. The guidance focuses on changes to the terms or conditions of share-based payment awards that would require the application of modification accounting and specifies that an entity ~~satisfies a performance obligation.~~would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal 2019, with early adoption ~~in fiscal 2018~~ permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements.

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

~~Going Concern~~

In ~~August 2014,~~February 2018, the FASB issued an accounting standard update, ~~that requires management~~which allows companies to ~~evaluate~~reclassify certain stranded income tax effects resulting from the enactment of the Tax Cuts and ~~disclose whether there are conditions and events that raise substantial doubt about an entity’s ability~~Jobs Act (the "TCJA") from accumulated other comprehensive income to continue as a going concern within one year after financial statements are issued. The evaluation and disclosure will be required to be made for both annual and interim reporting periods, if applicable, along with an evaluation as to whether management’s plans alleviate that doubt.retained earnings. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal ~~2017.~~2019, with early adoption permitted. The Company ~~does not believe~~is currently evaluating the impact of this ~~new~~ accounting standard update ~~will have a material impact~~ on its consolidated financial statements.

~~Income Statement Presentation – Extraordinary and Unusual Items~~Implementation Costs in a Cloud Computing Arrangement

In ~~January 2015,~~August 2018, the FASB issued an accounting standard update related to a client’s accounting for implementation costs incurred in a cloud computing arrangement that ~~eliminates from GAAP~~is a service contract. This guidance aligns the ~~concept~~requirements for capitalizing implementation costs in a cloud computing service contract with the guidance for capitalizing implementation costs to develop or obtain internal-use software. Capitalized implementation costs will be expensed over the term of ~~extraordinary items.~~the arrangement. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal ~~2017.~~2021, with early adoption permitted. The ~~standard primarily involves presentation and disclosure and, therefore,~~Company is ~~not expected to have a material~~currently evaluating the impact ~~on the Company’s financial condition, results~~ of ~~operations or its cash flows.~~

~~Simplification Guidance on Debt Issuance Costs~~

~~In April 2015, the FASB issued an~~this accounting standard update which changes the presentation of debt issuance costs in the applicable financial statements. Under the accounting standard update, an entity should present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. This accounting standard update will be effective for FactSet beginning in the first quarter of fiscal 2017. The Company does not believe this new accounting standard update will have a material impact on its consolidated financial statements.

In August 2015, the FASB issued an accounting standard update to amend the previous guidance issued in April 2015 and address debt issuance costs related to line-of-credit arrangements. The accounting standard update allows an entity to present debt issuance costs related to a line-of-credit as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. This accounting standard update did not impact the effective date of the previously issued guidance and the Company does not believe it will have a material impact on its consolidated financial statements.

~~Customers’ Accounting for Cloud Computing Costs~~

In April 2015, the FASB issued an accounting standard update to provide guidance on a customer’s accounting for cloud computing costs. Under the accounting standard update, a customer must determine whether a cloud computing arrangement contains a software license. If so, the customer would account for the fees related to the software license element in a manner consistent with how the accounting for software licenses is accounted for under previously issued guidance. If the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. This guidance will be effective for FactSet beginning in the first quarter of fiscal 2017. The Company does not believe this new accounting standard update will have a material impact on its consolidated financial statements.

No other new accounting pronouncements issued or effective as of August 31, ~~2015~~2018, have had or are expected to have an impact on the Company’s consolidated financial statements.

4. FAIR VALUE MEASURES

Fair Value Hierarchy

The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect their placement within the fair value hierarchy levels. FactSet has categorized its cash equivalents, investments and derivatives within the fair value hierarchy as follows:

Level 1 -applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. These Level 1 assets and liabilities include FactSet’s corporate money market funds that are classified as cash equivalents.

Level 2 -applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. The Company’s certificates of deposit and derivative instruments are classified as Level 2.

Level 3 -applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. There were no Level 3 assets or liabilities held by FactSet as of August 31, ~~2015~~2018 or ~~2014.~~2017.

(a) ~~Asse~~tsAssets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables shows by level within the fair value hierarchy the Company’s assets and liabilities that are measured at fair value on a recurring basis at August 31, ~~2015~~2018 and ~~2014 (in thousands):~~2017:

	Fair Value Measurements at Reporting Date Using								Fair Value Measurements at August 31, 2018
August 31, 2015	Level 1		Level 2		Level 3		Total
(in thousands)									Level 1		Level 2		Level 3		Total
Assets
Corporate money market funds⁽¹⁾	$	89,443	$	—	$	—	$	89,443	$	75	$	—	$	—	$	75
Certificates of deposit⁽²⁾		—		23,497		—		23,497
Derivative instruments⁽³⁾		—		1,035		—		1,035
Mutual Funds⁽²⁾										—		18,668		—		18,668
Certificates of deposit⁽³⁾										—		10,591		—		10,591
Derivative instruments⁽⁴⁾										—		90		—		90
Total assets measured at fair value	$	89,443	$	24,532	$	—	$	113,975	$	75	$	29,349	$	—	$	29,424

Liabilities
Derivative instruments⁽³⁾	$	—	$	1,602	$	—	$	1,602
Derivative instruments⁽⁴⁾									$	—	$	4,036	$	—	$	4,036
Total liabilities measured at fair value	$	—	$	1,602	$	—	$	1,602	$	—	$	4,036	$	—	$	4,036

	Fair Value Measurements at Reporting Date Using								Fair Value Measurements at August 31, 2017
August 31, 2014	Level 1		Level 2		Level 3		Total
(in thousands)									Level 1		Level 2		Level 3		Total
Assets
Corporate money market funds⁽¹⁾	$	75,363	$	—	$	—	$	75,363	$	26,677	$	—	$	—	$	26,677
Certificates of deposit⁽²⁾		—		20,008		—		20,008
Derivative instruments⁽³⁾		—		1,406		—		1,406
Mutual Funds⁽²⁾										—		18,364		—		18,364
Certificates of deposit⁽³⁾										—		14,080		—		14,080
Derivative instruments⁽⁴⁾										—		6,142		—		6,142
Total assets measured at fair value	$	75,363	$	21,414	$	—	$	96,777	$	26,677	$	38,586	$	—	$	65,263

Liabilities
Derivative instruments⁽³⁾	$	—	$	591	$	—	$	591
Derivative instruments⁽⁴⁾									$	—	$	—	$	—	$	—
Total liabilities measured at fair value	$	—	$	591	$	—	$	591	$	—	$	—	$	—	$	—

⁽¹⁾

The Company’s corporate money market funds are ~~traded in an active market~~readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. As such, the Company’s corporate money market funds are ~~classified~~classified as Level 1 and included in ~~cash~~Cash and cash ~~equivalents on~~equivalents within the ~~consolidated balance sheet.~~Consolidated Balance Sheets.

⁽²⁾

The Company’s mutual funds have a fair value based on the fair value of the underlying investments held by the mutual funds allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. As such, the Company’s mutual funds are classified as Level 2 and are classified as Investments (short-term) on the Consolidated Balance Sheets.

⁽³⁾

The Company’s certificates of deposit held for investment are not debt securities and are classified as Level 2. These certificates of deposit have original maturities greater than three months, but less than one year ~~and,~~and, as such, are classified as ~~investments (short-term) on~~Investments (short-term) within the ~~consolidated balance sheet.~~Consolidated Balance Sheets.

⁽³⁾⁽⁴⁾

The Company utilizes the income approach to measure fair value for its derivative instruments (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 therefore are classified as Level 2.

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.

~~(b)~~(b) Assets and Liabilities Measured at Fair Value on a ~~Non-recurring~~Non-Recurring Basis

Certain assets, including goodwill and intangible assets, and liabilities, are measured at fair value on a non-recurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances such as when they are deemed to be other-than-temporarily impaired. 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 ~~comparables,~~comparable, and discounted cash flow projections. An impairment charge is recorded when the cost exceeds its fair value, based upon the results of such valuations. During fiscal ~~2015~~2018 and ~~2014,~~2017, no fair value adjustments or material fair value measurements were required for the Company’s non-financial assets or liabilities.

(c)Assets and Liabilities Measured at Fair Value for Disclosure Purposes only

As of August 31, ~~2015,~~2018, and 2017, the fair value of the Company’s long-term debt was ~~$35.0~~$575.0 million, which approximated its carrying amount given its floating interest rate basis. ~~FactSet did not have any long-term debt as of August 31, 2014.~~ The fair value of the Company’s long-term debt was determined based on quoted market prices for debt with a similar maturity, and thus categorized as Level 2 in the fair value hierarchy.

5. DERIVATIVE INSTRUMENTS

Cash Flow Hedges

FactSet conducts business outside the U.S. in several currencies including the British Pound Sterling, Euro, Indian Rupee, Japanese Yen ~~Indian Rupee~~ and Philippine Peso. As such, it is exposed to movements in foreign currency exchange rates compared to the U.S. dollar. The Company utilizes derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency. The Company does not enter into foreign ~~exchange~~currency forward contracts for trading or speculative purposes. In designing a specific hedging approach, FactSet considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. The changes in fair value for these foreign currency forward contracts are initially reported as a component of AOCL and subsequently reclassified into operating expenses when the hedged exposure affects earnings. There was no discontinuance of cash flow hedges during fiscal ~~2015~~2018 or ~~2014,~~2017, and as such, no corresponding gains or losses related to changes in the value of the Company’s contracts were reclassified into earnings prior to settlement.

As of August 31, ~~2015,~~2018, FactSet maintained the following foreign currency forward contracts to hedge its ~~Indian Rupee, British Pound Sterling and Euro exposure:~~exposures:

●

Philippine Peso – foreign currency forward contracts to hedge approximately 75% of its Philippine Peso exposure through the fourth quarter of fiscal 2020.

●

Indian Rupee- – foreign currency forward contracts to hedge approximately 75% of its Indian Rupee exposure through the third quarter of fiscal 2019 and 50% of its exposure from the fourth quarter of fiscal 2019 through the end of the second quarter of fiscal ~~2018.~~2020.

●

Euro – foreign currency forward contracts to hedge approximately 50% of its Euro exposure through the third quarter of fiscal 2019.

●

British Pound Sterling - – foreign currency forward contracts to hedge approximately 50% of its British Pound Sterling exposure through the ~~second~~third quarter of fiscal ~~2016.~~

●

~~Euro -~~~~foreign currency forward contracts to hedge approximately 50% of its Euro exposure through the fourth quarter of fiscal 2016.~~2019.

The following is a summary of all hedging positions and corresponding fair ~~values (in thousands):~~values:

	Gross Notional Value				Fair Value Asset (Liability)					Gross Notional Value				Fair Value (Liability) Asset
Currency Hedged (in U.S. dollars)	Aug 31, 2015		Aug 31, 2014		Aug 31, 2015			Aug 31, 2014
Currency Hedged (in thousands, in U.S. dollars)										August 31, 2018		August 31, 2017		August 31, 2018			August 31, 2017
Philippine Peso										$	52,000	$	—	$	(1,230	)	$	—
Indian Rupee	$	56,320	$	38,479	$	(990	)	$	700		50,780		51,000		(1,490	)		6,142
Philippine Peso		—		6,500		—			115
Euro		20,263		—		143			—		26,312		—		(503	)		—
British Pound Sterling		15,831		—		280			—		18,995		—		(723	)		—
Total	$	92,414	$	44,979	$	(567	)	$	815	$	148,087	$	51,000	$	(3,946	)	$	6,142

As of August 31, ~~2015,~~2018, the gross notional value of foreign ~~exchange~~currency forward contracts to purchase Philippine Pesos with U.S. dollars was PHP 2.8 billion. The gross notional value of foreign currency forward contracts to purchase Indian Rupees with U.S. dollars was Rs. ~~4.0~~3.6 billion. The gross notional value of foreign ~~exchange~~currency forward contracts to purchase Euros with U.S. dollars was ~~€18.1~~€ 22.0 million. The gross notional value of foreign ~~exchange~~currency forward contracts to purchase British Pound Sterling with U.S. dollars was ~~£10.5~~£14.0 million.

Counterparty Credit Risk

As a result of the use of derivative instruments, the Company is exposed to counterparty credit risk. FactSet has incorporated counterparty risk into the fair value of its derivative assets and its own credit risk into the value of the Company’s derivative ~~liabilities.~~liabilities, when applicable. FactSet calculates credit risk from observable data related to credit default swaps (“CDS”) as quoted by publicly available information. Counterparty risk is represented by CDS spreads related to the senior secured debt of the respective bank with whom FactSet has executed these derivative transactions. ~~Because~~As CDS spread information is not available for FactSet, the Company’s credit risk is determined based on using a simple average of CDS spreads for peer companies. To mitigate counterparty credit risk, FactSet enters into contracts with large financial ~~institutions. The Company~~institutions and regularly reviews its credit exposure balances as well as the creditworthiness of the counterparties. The Company does not expect any losses as a result of default of its counterparties.

Fair Value of Derivative Instruments

The following tables provide a summary of the fair value amounts of derivative instruments and gains and losses on derivative ~~instruments (in thousands):~~instruments:

Designation of Derivatives
Balance Sheet Location

Aug 31, 2015

Aug 31, 2014

Derivatives designated as hedging instruments
Assets: Foreign Currency Forward Contracts

Prepaid expenses and other current assets
$ 1,035 $ 114

Other assets
$ — 1,292

Liabilities: Foreign Currency Forward Contracts

Accounts payable and accrued expenses
$ — $ 591

Deferred rent and other non-current liabilities
$ 1,602 $ —

Designation of Derivatives (in thousands)	Balance Sheet Location	August 31, 2018		August 31, 2017
Derivatives designated as hedging instruments	Assets: Foreign Currency Forward Contracts
	Prepaid expenses and other current assets	$	90	$	3,796
	Other assets	$	—	$	2,346

	Liabilities: Foreign Currency Forward Contracts
	Accounts payable and accrued expenses	$	1,731	$	—
	Deferred rent and other non-current liabilities	$	2,305	$	—

All derivatives were designated as hedging instruments as of August 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

Derivatives in Cash Flow Hedging Relationships

The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the each of the three fiscal years ended August 31, ~~(in thousands):~~2018, 2017 and 2016:

	(Loss) Gain Recognized in AOCL on Derivatives (Effective Portion)								Location of Loss	(Loss) Reclassified from AOCL into Income (Effective Portion)
(in thousands)																			(Loss) Gain Recognized in AOCL on Derivatives (Effective Portion)								Location of Gain (Loss) Reclassified from AOCL	Gain (Loss) Reclassified from AOCL into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	2015			2014		2013			Reclassified from AOCL into Income(Effective Portion)	2015			2014			2013			2018			2017		2016			into Income (Effective Portion)	2018		2017			2016
Foreign currency forward contracts	$	(1,939	)	$	8,294	$	(6,258	)	SG&A	$	(559	)	$	(260	)	$	(1,000	)	$	(7,700	)	$	5,183	$	(1,806	)	SG&A	$	3,106	$	(2,883	)	$	(451	)

No amount of ineffectiveness was recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss was included in the assessment of hedge effectiveness. As of August 31, ~~2015,~~2018, FactSet estimates that ~~$1.0~~$1.6 million of net derivative ~~gains~~losses related to its cash flow hedges included in AOCL will be reclassified into earnings within the next 12 months.

Offsetting of Derivative Instruments

FactSet’s master netting and other similar arrangements with its respective counterparties allow for net settlement under certain conditions. As of August 31, ~~2015~~2018 and ~~2014, respectively, information related to these offsetting arrangements was as follows (in thousands):~~2017, there were no net settlements recorded on Consolidated Balance Sheets.

Derivatives Offset in Consolidated Balance Sheets

August 31, 2015

Gross Derivative Amounts

Gross Derivative Amounts Offset in Balance Sheet

Net
Amounts

Fair value of assets
$ 1,040 $ (5 ) $ 1,035
Fair value of liabilities
(1,607 ) 5 (1,602 )
Total
$ (567 ) $ — $ (567 )

Derivatives Offset in Consolidated Balance Sheets

August 31, 2014

Gross Derivative Amounts

Gross Derivative Amounts Offset in Balance Sheet

Net
Amounts

Fair value of assets
$ 1,406 $ — $ 1,406
Fair value of liabilities
(626 ) 35 (591 )
Total
$ 780 $ 35 $ 815

6. OTHER COMPREHENSIVE(LOSS) INCOMEAND ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of other comprehensive (loss) income during the fiscal years ended August 31, ~~2015, 2014,~~2018, 2017 and ~~2013~~2016 are as ~~follows (in thousands):~~follows:

	August 31, 2015						August 31, 2014				August 31, 2013						August 31, 2018						August 31, 2017				August 31, 2016
	Pre-tax			Net of tax			Pre-tax		Net of tax		Pre-tax			Net of tax
(in thousands)																	Pre-tax			Net of tax			Pre-tax		Net of tax		Pre-tax			Net of tax
Foreign currency translation adjustments	$	(25,263	)	$	(25,263	)	$	7,895	$	7,895	$	(5,151	)	$	(5,151	)	$	(9,431	)	$	(9,431	)	$	28,816	$	28,816	$	(23,644	)	$	(23,644	)
Realized loss on cash flow hedges reclassified to earnings⁽¹⁾		559			352			260		164		1,000			622
Realized (gain) loss on cash flow hedges reclassified to earnings ⁽¹⁾																		(3,106	)		(2,128	)		2,883		1,813		451			284
Unrealized (loss) gain on cash flow hedges recognized in AOCL		(1,939	)		(1,220	)		8,294		5,193		(6,258	)		(3,918	)		(7,700	)		(5,160	)		5,183		3,204		(1,806	)		(1,141	)
Other comprehensive (loss) income	$	(26,643	)	$	(26,131	)	$	16,449	$	13,252	$	(10,409	)	$	(8,447	)
Other comprehensive income (loss)																	$	(20,237	)	$	(16,719	)	$	36,882	$	33,833	$	(24,999	)	$	(24,501	)

⁽¹⁾

Reclassified to Selling, General and Administrative Expenses

The components of AOCL are as ~~follows (in thousands):~~follows:

	August 31, 2015			August 31, 2014
Accumulated unrealized (losses) gains on cash flow hedges, net of tax	$	(358	)	$	510
(in thousands)							August 31, 2018			August 31, 2017
Accumulated unrealized (gain) losses on cash flow hedges, net of tax							$	(3,486	)	$	3,802
Accumulated foreign currency translation adjustments		(43,694	)		(18,431	)		(47,953	)		(38,522	)
Total accumulated other comprehensive loss	$	(44,052	)	$	(17,921	)	$	(51,439	)	$	(34,720	)

7. SEGMENT INFORMATION

Operating segments are defined as (i) components of an enterprise that engage in business activities from which they may earn ~~revenues~~revenue and incur ~~expenses, whose~~expense, (ii) with operating results are regularly reviewed by the enterprise’s chief operating decision maker ~~(“CODM”)~~ to make decisions about resources to be allocated to the segment and assess its performance, and (iii) for which discrete financial information is available. Executive management, along with the CEO, constitute FactSet’s ~~CODM is its~~chief operating decision making group (“CODMG”). Executive management consists of certain executives who directly report to the CEO, consisting of the Chief ~~Executive~~Financial Officer, ~~who~~Chief Technology and Product Officer, Global Head of Sales and Client Solutions, General Counsel, Chief Human Resources Officer and Head of Analytics & Trading. The CODMG reviews financial information at the operating segment level and is responsible for making decisions about resources allocated amongst the operating segments based on actual results.

FactSet’s operating segments are aligned with how the Company, including its ~~CODM,~~CODMG, manages the business and the demographic markets in which FactSet serves. The Company’s internal financial reporting structure is based on three segments; the U.S., Europe and Asia Pacific. FactSet believes this alignment helps it better manage the business and view the markets the Company serves, which are centered on providing integrated global financial and economic information. ~~Sales, consulting, data collection, product development and software engineering are the~~The primary functional groups within the U.S., Europe and Asia Pacific segments ~~that~~include sales, consulting, data collection, product development and software engineering, which provide global financial and economic information to investment managers, investment banks and other financial services professionals.

The U.S. segment services ~~finance~~investment professionals including financial institutions throughout the ~~Americas, while the~~Americas. The European and Asia Pacific segments service investment professionals located throughout Europe and Asia ~~respectively.The accounting policies of the segments are the same as those described in the Note 3,~~~~Summary of Significant Accounting Policies~~.

The European segment is headquartered in London, England and maintains office locations in France, Germany, Italy, Ireland, Latvia, Luxembourg, the Netherlands, Spain, South Africa, Sweden and Dubai. The Asia Pacific, ~~segment is headquartered in Tokyo, Japan with office locations in Australia, Hong Kong, Singapore and Mumbai, India.~~respectively. Segment revenues reflect direct sales to clients based in their respective geographic locations. ~~There are no intersegment or intercompany sales of the FactSet services.~~ Each segment records compensation expense, including stock-based compensation, amortization of intangible assets, depreciation of furniture and fixtures, amortization of leasehold improvements, communication costs, professional fees, rent expense, travel, ~~marketing,~~ office and other direct expenses.

Expenditures associated with the Company’s data centers, ~~third party~~third-party data costs and corporate headquarters charges are recorded by the U.S. segment and are not allocated to the other segments. The content collection centers located in India and the Philippines benefit all of the Company’s operating segments and thus the expenses incurred at these locations are allocated to each segment based on a percentage of revenues. Of the total ~~$308.3~~$701.8 million of goodwill reported by the Company at August 31, ~~2015, 69%~~2018, 54% was recorded in the U.S. segment, ~~30%~~45% in the European segment and the remaining 1% in the Asia Pacific segment.

The following reflects the results of operations of the segments consistent with the Company’s management system. These results are used, in part, by management, both in evaluating the performance of, and in allocating resources to, each of the ~~segments (in thousands).~~segments.

Year Ended August 31, 2015	U.S.		Europe		Asia Pacific		Total
(in thousands) Year Ended August 31, 2018									U.S.		Europe		Asia Pacific		Total
Revenues from clients	$	678,774	$	251,522	$	76,472	$	1,006,768	$	841,908	$	387,589	$	120,648	$	1,350,145
Segment operating profit		172,980		116,310		42,628		331,918		148,095		148,977		69,132		366,204
Total assets		427,990		239,689		68,992		736,671		724,259		585,497		109,692		1,419,448
Depreciation and amortization		23,645		5,135		2,569		31,349		37,453		15,710		4,122		57,285
Stock-based compensation		23,006		2,991		374		26,371		26,014		4,857		645		31,516
Capital expenditures		22,459		460		2,763		25,682		20,358		3,140		10,022		33,520

Year Ended August 31, 2014	U.S.		Europe		Asia Pacific		Total
Year Ended August 31, 2017									U.S.		Europe		Asia Pacific		Total
Revenues from clients	$	624,642	$	227,395	$	68,298	$	920,335	$	784,146	$	330,332	$	106,701	$	1,221,179
Segment operating profit		165,004		100,937		36,278		302,219		137,104		153,676		61,355		352,135
Total assets		362,255		239,654		61,303		663,212		703,941		609,368		100,006		1,413,315
Depreciation and amortization		25,574		5,656		3,205		34,435		35,244		9,837		3,213		48,294
Stock-based compensation		20,288		2,231		372		22,891		30,247		3,320		616		34,183
Capital expenditures		16,047		647		1,049		17,743		29,561		2,385		4,916		36,862

Year Ended August 31, 2013

U.S.

Europe

Asia Pacific

Total

Revenues from clients
$ 586,865 $ 208,827 $ 62,420 $ 858,112
Segment operating profit
138,706 100,187 30,526 269,419
Total assets
444,406 193,202 52,589 690,197
Depreciation and amortization
27,757 4,027 3,995 35,779
Stock-based compensation
37,307 2,264 380 39,951
Capital expenditures
13,649 1,276 3,592 18,517

Year Ended August 31, 2016	U.S.		Europe		Asia Pacific		Total
Revenues from clients	$	755,492	$	277,682	$	93,918	$	1,127,092
Segment operating profit		165,251		131,410		53,015		349,676
Total assets		654,796		279,864		84,501		1,019,161
Depreciation and amortization		31,529		4,220		2,303		38,052
Stock-based compensation		25,776		3,459		558		29,793
Capital expenditures		38,631		4,092		5,017		47,740

GEOGRAPHIC INFORMATION -The following table sets forth information for those countries that are 10% or more of ~~revenues (in thousands):~~revenues:

Years Ended August 31,	2015		2014		2013
Revenues⁽¹⁾
							Years ended August 31,
(in thousands)							2018		2017		2016
*Revenues*⁽¹⁾
United States	$	678,774	$	624,642	$	586,865	$	841,908	$	784,146	$	755,492
United Kingdom		144,769		131,848		121,072		332,006		163,732		154,902
All other European countries		106,753		95,547		87,755		55,583		166,600		122,780
Asia Pacific		76,472		68,298		62,420		120,648		106,701		93,918
Total revenues	$	1,006,768	$	920,335	$	858,112	$	1,350,145	$	1,221,179	$	1,127,092

^⁽¹⁾

Revenues are attributed to countries based on the location of the client.

The following table sets forth long-lived assets by geographic ~~area (in thousands):~~area:

At August 31,	2015		2014		2013
Long-lived Assets⁽¹⁾
							At August 31,
(in thousands)							2018		2017			2016
*Long-lived Assets*⁽¹⁾
United States	$	49,923	$	46,294	$	51,184	$	74,792	$	79,299		$	70,646
United Kingdom		3,655		4,669		4,806		5,806		6,012			5,772
All other European countries		1,322		2,267		3,051		5,774		6,306			1,018
Asia Pacific		4,364		4,411		6,330		14,173		8,837			7,186
Total long-lived assets	$	59,264	$	57,641	$	65,371	$	100,545	$	100,454	��	$	84,622

⁽¹⁽¹⁾⁾

Long-lived assets consist of property, equipment and leasehold improvements, net of accumulated depreciation and amortization and exclude goodwill, intangible assets, deferred taxes and other assets.

8.8. BUSINESS COMBINATIONS

~~Code Red, Inc.~~BISAM

On ~~February 6, 2015,~~March 17, 2017, FactSet acquired ~~Code Red, Inc.~~BI-SAM Technologies (“~~Code Red”~~BISAM”) for ~~$36.0~~a total purchase price of $217.6 million. ~~At the time~~BISAM is a global provider of ~~acquisition, Code Red employed 32 individuals~~portfolio performance and ~~had annual subscriptions of $9.3 million. Code Red provides research~~attribution, multi-asset risk, GIPS composites management ~~technologies~~and reporting. BISAM’s product offerings include B-One, BISAM’s cross-asset solution, which will serve as a complement to ~~the investment community, including endowments~~both FactSet’s portfolio analytics suite and ~~foundations, institutional asset managers, sovereign wealth funds, pensions,~~client reporting solutions, and ~~hedge funds. With the addition of Code Red to FactSet's existing Research Management Solutions (“RMS”), FactSet now offers an RMS~~Cognity, which enhances FactSet’s risk analysis for ~~all its clients' workflows, which is consistent with the Company’s strategy of offering software~~derivatives and ~~tools to make client workflows more efficient. This factor~~quantitative portfolio construction. These factors contributed to a purchase price in excess of fair value of ~~Code Red’s~~BISAM’s net tangible and intangible assets, leading to the recognition of goodwill. At the time of acquisition, BISAM employed over 160 employees based primarily in its New York, Boston, Paris, London and Sofia offices. Total transaction costs of $3.2 million were recorded within Selling, General and Administrative (“SG&A”) expenses in the Consolidated Statements of Income during fiscal 2017.

The total purchase price ~~of Code Red is as follows (in thousands):~~

Cash consideration
$ 32,962
Fair value of FactSet stock issued
2,991
Total purchase price
$ 35,953

~~The purchase price~~ was allocated to ~~Code Red’s~~BISAM’s net tangible and intangible assets based upon their estimated fair value as of the date of acquisition. Based upon ~~these estimated fair values and the preliminary intangible assets valuation,~~ the purchase price and the valuation, the allocation is as ~~follows (in thousands):~~follows:

Tangible assets acquired
$ 3,090
Amortizable intangible assets

Software technology
4,728
Client relationships
3,089
Non-compete agreements
277
Trade name
127
Goodwill
29,627
Total assets acquired
$ 40,938
Liabilities assumed
(4,985 )
Net assets acquired
$ 35,953

(in thousands)
Tangible assets acquired	$	27,583
Amortizable intangible assets
Software technology		18,261
Client relationships		37,597
Trade name		741
Goodwill		173,898
Total assets acquired	$	258,080
Liabilities assumed		(40,443	)
Net assets acquired	$	217,637

Intangible assets of ~~$8.2~~$56.6 million have been allocated to amortizable intangible assets consisting of client relationships, amortized over 16 years using an accelerated amortization method; software technology, amortized over ~~six~~five years using a straight-line amortization ~~method; client relationships, amortized over seven years using an accelerated amortization method; non-compete agreements, amortized over four years using~~method; and a ~~straight-line amortization method; and~~ trade name, amortized over ~~three~~four years using a straight-line amortization method.

Goodwill totaling ~~$29.6~~$173.9 million represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Goodwill generated from the ~~Code Red~~BISAM acquisition is included in the ~~U.S. segment~~US and European segments and is not deductible for income tax purposes. The results of operations of ~~Code Red~~BISAM have been included in the Company’s Consolidated Statements of Income since the completion of the acquisition on ~~February 6, 2015 and the results did not have a material impact as of August 31, 2015.~~March 17, 2017. Pro forma information has not been presented because the effect of ~~this~~the BISAM acquisition ~~was~~is not material to the Company’s consolidated financial results.

~~Matrix Data Limited~~Vermilion

~~During the second quarter of fiscal 2014,~~On November 8, 2016, FactSet acquired ~~Matrix Data~~Vermilion Holdings Limited (“~~Matrix”~~Vermilion”) for a total purchase price of ~~$31.8~~$67.9 million. ~~Matrix’ primary line~~Vermilion is a global provider of ~~business is providing intelligence~~client reporting and communications software and services to the UK financial services ~~industry~~industry. Client reporting is a growing area of the market as regulatory requirements rise and covering market share of mutual fund distribution. Matrix has developed customer, channel and market benchmarking solutions that help clients optimize product distribution and improve marketing effectiveness to drive revenue growth. Atwith the ~~time of acquisition, Matrix had annual subscriptions of $7 million. The~~ acquisition of ~~Matrix allows~~Vermilion and its Vermilion Reporting Suite (“VRS”), FactSet tonow offers a workflow around all elements of the client reporting process, which it expects will expand its current U.S. advisor-sold investments and insurance products to the UK, with the potential to ultimately expand this coverage throughout continental Europe. The opportunity for FactSet to develop an international presence and complement its existing U.S. product offeringsas investors grow increasingly sophisticated. This factor contributed to a purchase price in excess of fair value of ~~the Matrix~~Vermilion’s net tangible and intangible assets, leading to the recognition of ~~goodwill~~goodwill. At the time of acquisition, Vermilion employed 59 individuals in ~~connection with~~its London, Boston and Singapore offices. Total transaction costs related to the ~~acquisition.~~acquisition were $0.7 million in fiscal 2017 and recorded within SG&A expenses in the Consolidated Statements of Income during fiscal 2017.

The total purchase price was allocated to ~~Matrix’~~Vermilion’s net tangible and intangible assets based upon their estimated fair value as of the date of acquisition. ~~Allocation of~~Based upon the purchase price toand the ~~assets acquired and liabilities assumed was finalized during~~valuation, the ~~third quarter of fiscal 2014. There were no material adjustments between the preliminary and final~~ allocation ~~of purchase price.~~is as follows:

(in thousands)
Tangible assets acquired	$	7,916
Amortizable intangible assets
Software technology		10,916
Client relationships		5,954
Non-compete agreements		806
Trade name		571
Goodwill		51,157
Total assets acquired	$	77,320
Liabilities assumed		(9,434	)
Net assets acquired	$	67,886

~~The final Matrix purchase price of $31.8 million was allocated as follows (in thousands):~~

Tangible assets acquired
$ 7,459
Amortizable intangible assets

Data content
3,408
Client relationships
2,816
Software technology
1,708
Trade name
670
Non-compete agreements
147
Goodwill
25,531
Total assets acquired
$ 41,739
Liabilities assumed
(9,941 )
Net assets acquired
$ 31,798

Intangible assets of ~~$8.7~~$18.2 million have been allocated to amortizable intangible assets consisting of ~~data content,~~client relationships, amortized over ~~four~~15 years using an accelerated amortization method; software technology, amortized over six years using a straight-line amortization ~~method; client relationships, amortized over eight years using an accelerated amortization method; software technology, amortized over five years using a straight-line amortization method;~~method; non-compete agreements, amortized over three years using a straight-line amortization ~~method;~~method; and a trade name, amortized over four years using a straight-line amortization method.

Goodwill totaling ~~$25.5~~$51.2 million represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Goodwill generated from the ~~Matrix~~Vermilion acquisition is included in the European segment and is not deductible for income tax purposes. The results of ~~the~~ operations of ~~Matrix~~Vermilion have been included in the Company’s Consolidated ~~Statement~~Statements of Income since the completion of the acquisition ~~and did not have a material impact~~ on ~~consolidated fiscal 2014 financial results, and as such, pro~~November 8, 2016. Pro forma information has not been ~~presented.~~presented because the effect of the Vermilion acquisition is not material to the Company’s consolidated financial results.

~~Revere Data~~

Portware LLC

On ~~September 1, 2013,~~October 16, 2015, FactSet ~~paid $15.3 million~~acquired Portware LLC (“Portware”) for a total purchase price of $263.6 million. At the time of acquisition, Portware employed 166 individuals in ~~cash to acquire~~its New York, London, Hong Kong, and Hyderabad, India offices. Portware is a global provider of multi-asset trade automation solutions for mega and large asset managers. With the ~~assets~~acquisition of ~~Revere Data, LLC (“Revere”) to complement the Company's commitment to provide its clients with insightful content sets. Revere classifies companies into a unique industry taxonomy and~~Portware, FactSet now offers a ~~database of supply chain relationships~~platform that ~~helps investors identify companies’ interrelationships and mutual dependencies. As of the date of acquisition, Revere had annual subscriptions of $5 million. The opportunity for FactSet~~it expects will increase value to ~~offer this data~~global asset managers by expanding its capabilities to ~~new and existing clients~~include multi-asset trade automation. This factor contributed to a purchase price in excess of fair value of ~~the Revere~~Portware’s net tangible and intangible ~~assets. As a result, FactSet~~assets, leading to the recognition of goodwill. Total transaction costs related to the acquisition were $0.7 million for the year ended August 31, 2016. These transaction expenses were recorded ~~goodwill~~within SG&A expenses in ~~connection with this transaction.~~the Consolidated Statements of Income.

The total purchase price was allocated to ~~Revere’s~~Portware’s net tangible and intangible assets based upon their estimated fair value as of the date of acquisition. ~~Allocation of~~Based upon the purchase price toand the ~~assets acquired and liabilities assumed was finalized during~~valuation, the ~~second quarter of fiscal 2014. There were no material adjustments between the preliminary and final~~ allocation ~~of purchase price. The final Revere purchase price of $15.3 million was allocated~~is as ~~follows (in thousands):~~follows:

Tangible assets acquired
$ 544
Amortizable intangible assets

Data content
2,799
Client relationships
827
Non-compete agreements
162
Trade name
293
Goodwill
11,612
Total assets acquired
$ 16,237
Liabilities assumed
(949 )
Net assets acquired
$ 15,288

(in thousands)
Tangible assets acquired	$	9,656
Amortizable intangible assets
Software technology		43,000
Client relationships		27,000
Non-compete agreements		3,500
Trade name		2,000
Goodwill		187,378
Total assets acquired	$	272,534
Liabilities assumed		(8,951	)
Net assets acquired	$	263,583

Intangible assets of ~~$4.1~~$75.5 million have been allocated to amortizable intangible assets consisting of ~~data content,~~client relationships, amortized over 16 years using an accelerated amortization method; software technology, amortized over eight years using a straight-line amortization method; non-compete agreements, amortized over seven years using a straight-line amortization method; and a trade name, amortized over five years using a straight-line amortization method; client relationships, amortized over seven years using an accelerated amortization method; non-compete agreements, amortized over two years using a straight-line amortization method; and trade name, amortized over four years using a straight-line amortization method.

Goodwill totaling ~~$11.6~~$187.4 million represents the excess of the purchase price over the fair value of the net tangible and intangible assets ~~acquired. Goodwill generated from the Revere acquisition~~acquired and is included in the U.S. ~~segment and~~segment. Approximately 77% of the total goodwill generated from the Portware acquisition is deductible for income tax purposes. The results of ~~the~~ operations of ~~Revere~~Portware have been included in the Company’s Consolidated ~~Statement~~Statements of Income since the completion of the acquisition on ~~September 1, 2013 and did not have a material impact on fiscal 2014 results.~~October 16, 2015. Pro forma information has not been presented because the ~~effects~~effect of ~~this~~the Portware acquisition ~~were~~is not material to the Company’s consolidated financial results.

9. DISPOSITIONS

During the third quarter of fiscal 2016, the Company entered into a definitive stock purchase agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell its market research business, consisting of Market Metrics LLC and Matrix-Data Limited (collectively “Market Metrics” or the “disposal group”) and associated assets (the “Transaction”). On July 1, 2016, FactSet completed the Transaction and received $165.0 million in cash, less estimated working capital and certain adjustments set forth in the Purchase Agreement, including a $9.7 million bonus adjustment amount. The Company recognized a pre-tax gain on the sale of $112.5 million in fourth quarter of fiscal 2016, which is recorded within other (expense)income in the Consolidated Statements of Income. In the second quarter of fiscal 2017, the Company finalized the working capital adjustment and recognized a pre-tax loss of $1.2 million within other (expense)income in the Consolidated Statements of Income.

The Company assessed the Transaction and the disposal group and determined that the sale does not represent a strategic shift in its business that has a major effect on its consolidated results of operations, financial position or cash flows. Accordingly, the disposal group is not presented in the consolidated financial statements as a discontinued operation. The results of the disposal group through the date the Transaction closed are reported within the U.S. segment (for Market Metrics LLC) and the European segment (for Matrix-Data Limited).

9.10. GOODWILL

Changes in the carrying amount of goodwill by segment for fiscal years ended August 31, ~~2015~~2018 and ~~2014~~2017 are as ~~follows (in thousands):~~follows:

U.S.

Europe

Asia Pacific

Total

Balance at August 31, 2013
$ 167,822 $ 73,424 $ 3,327 $ 244,573
Goodwill acquired during the period
11,612 25,531 — 37,143
Foreign currency translations
— 4,077 (185 ) 3,892
Balance at August 31, 2014
$ 179,434 $ 103,032 $ 3,142 $ 285,608
Goodwill acquired during the period
32,435 — — 32,435
Foreign currency translations
— (9,307 ) (449 ) (9,756 )
Balance at August 31, 2015
$ 211,869 $ 93,725 $ 2,693 $ 308,287

(in thousands)	U.S.			Europe			Asia Pacific			Total
Balance at August 31, 2016	$	367,480		$	82,280		$	3,155		$	452,915
Acquisitions and other adjustments		19,355			216,047			—			235,402
Foreign currency translations		—			19,432			(189	)		19,243
Balance at August 31, 2017	$	386,835		$	317,759		$	2,966		$	707,560
Acquisitions and other adjustments		(640	)		(1,562	)		—			(2,202	)
Foreign currency translations		—			(3,503	)		(22	)		(3,525	)
Balance at August 31, 2018	$	386,195		$	312,694		$	2,944		$	701,833

Goodwill is not amortized as it ~~has~~is estimated to have an ~~estimated~~ indefinite life. At least annually, the Company is required to test goodwill at the reporting unit level for potential ~~impairment. Goodwill is tested for~~ impairment, and, if impaired, write down to fair value based on the present value of discounted cash ~~flows, and, if impaired, written down to fair value based on discounted cash~~ flows. The Company’s reporting units evaluated for potential impairment were the U.S., Europe and Asia Pacific, which reflect the level of internal reporting the Company ~~has~~uses to manage its business and operations. The three reporting units ~~which~~ are consistent with the operating segments reported as there is no discrete financial information available for the subsidiaries within each operating segment. The Company’s reporting units evaluated for potential impairment were the U.S., Europe and Asia Pacific, which reflects the level of internal reporting the Company uses to manage its business and operations. The Company performed its annual goodwill impairment test during the fourth quarter of fiscal ~~2015,~~2018, consistent with the timing of previous ~~years, at which time it~~years. It was determined that there ~~were~~was no ~~indications of~~ impairment, with the fair value of each of the Company’s reporting units significantly exceeding carrying value. During fiscal 2017 the Company acquired goodwill of $235.4 million representing the excess of the purchase price over the fair value of the net tangible and intangible assets from acquisitions completed in fiscal 2017.

10.11. INTANGIBLE ASSETS

During fiscal 2017, $93.2 million of intangible assets were acquired with a weighted average useful life of 11.5 years.

The gross carrying amounts and accumulated amortization totals related to the Company’s identifiable intangible assets are as ~~follows (in thousands):~~

At August 31, 2015

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Data content
$ 39,911 $ 16,667 $ 23,244
Client relationships
27,873 18,241 9,632
Software technology
21,203 15,042 6,161
Non-compete agreements
1,058 637 421
Trade names
1,614 1,020 594
Total
$ 91,659 $ 51,607 $ 40,052

At August 31, 2014

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Data content
$ 56,974 $ 27,644 $ 29,320
Client relationships
25,821 17,443 8,378
Software technology
22,881 20,089 2,792
Non-compete agreements
2,465 1,881 584
Trade names
1,729 958 771
Total
$ 109,870 $ 68,015 $ 41,855

~~During fiscal 2015, $9.1 million of intangible assets were acquired with a weighted average useful life of 6.3 years.~~follows:

At August 31, 2018 (in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Data content	$	33,992	$	20,990	$	13,002
Client relationships		98,882		29,387		69,495
Software technology		106,505		44,231		62,274
Non-compete agreements		4,840		2,381		2,459
Trade names		4,070		2,365		1,705
Total	$	248,289	$	99,354	$	148,935

At August 31, 2017 (in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Data content	$	34,116	$	18,899	$	15,217
Client relationships		99,779		22,339		77,440
Software technology		105,963		30,889		75,074
Non-compete agreements		4,833		1,518		3,315
Trade names		4,080		1,583		2,497
Total	$	248,771	$	75,228	$	173,543

~~The details of the intangible assets acquired in the Code Red acquisition during fiscal 2015 are outlined as follows (in thousands):~~

Code Red Preliminary Intangible Assets Allocation

Amortization Period (years)

Acquisition Cost

Software technology
6.0 $ 4,728
Client relationships
7.0 3,089
Non-compete agreements
4.0 277
Trade name
3.0 127
Total
6.3 $ 8,221

Amortization expense recorded for intangible assets during fiscal years ~~2015, 2014~~2018, 2017 and ~~2013~~2016 was ~~$8.2~~$24.7 million, ~~$8.5~~$19.9 million and ~~$7.1~~$14.8 million, respectively. As of August 31, ~~2015,~~2018, estimated intangible asset amortization expense for each of the next five years and thereafter are as ~~follows (in thousands):~~follows:

Fiscal Year	Estimated Amortization Expense
2016	$	7,031
2017		6,949
2018		5,816
Fiscal Year (in thousands)			Estimated Amortization Expense
2019		4,492	$	23,940
2020		3,461		23,192
2021				21,284
2022				18,718
2023				13,890
Thereafter		12,303		47,911
Total	$	40,052	$	148,935

11.12. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements consist of the ~~following (in thousands):~~following:

At August 31,	2015			2014
							August 31,
(in thousands)							2018			2017
Leasehold improvements	$	92,427		$	90,487		$	119,479		$	113,760
Computers and related equipment		87,732			81,853			181,623			138,195
Furniture and fixtures		33,120			29,373			44,699			42,532

Subtotal	$	213,279		$	201,713		$	345,801		$	294,487
Less accumulated depreciation and amortization		(154,015	)		(144,072	)		(245,256	)		(194,033	)
Property, equipment and leasehold improvements, net	$	59,264		$	57,641		$	100,545		$	100,454

Depreciation expense was ~~$23.1~~$32.6 million, ~~$25.9~~$28.0 million and ~~$28.4~~$23.3 million for fiscal years ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

12.13. COMMON STOCK AND EARNINGS PER SHARE

On May ~~12, 2015,~~7, 2018, FactSet’s Board of Directors approved a ~~12.8%~~14.3% increase in the regular quarterly dividend from ~~$0.39~~$0.56 to ~~$0.44~~$0.64 per ~~share, or $1.76 per share per annum.~~share.

Shares of common stock outstanding were as ~~follows (in thousands):~~ follows:

Years Ended August 31,	2015			2014			2013
										Years ended August 31,
(in thousands)										2018			2017			2016
Balance, beginning of year (September 1)		41,793			43,324			44,279			39,023			40,038			41,317
Common stock issued for employee stock plans		1,213			959			2,459			711			693			823
Repurchases of common stock		(1,689	)		(2,490	)		(3,414	)
Repurchase of common stock from employees⁽¹⁾											(8	)		(50	)		(28	)
Repurchase of common stock under the share repurchase program											(1,534	)		(1,555	)		(1,478	)
Repurchase of common stock under accelerated share repurchase agreement											—			(103	)		(596	)
Balance, end of year (August 31)		41,317			41,793			43,324			38,192			39,023			40,038

⁽¹⁾

For fiscal 2018, 2017 and 2016, the Company repurchased 8,070, 49,771 and 27,625 shares, or $1.5 million, $7.8 million and $4.5 million, of common stock, respectively, in settlement of employee tax withholding obligations due upon the vesting of restricted stock.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share (“EPS”) computations is as ~~follows (in thousands, except per share data):~~follows:

Net Income (Numerator) Weighted Average Common Shares (Denominator) Per Share Amount
Years Ended August 31,

2015

2014

2013

2015

2014

2013

2015

2014

2013

Basic EPS

Income available to common stockholders
$ 241,051 $ 211,543 $ 198,637 41,572 42,436 43,890 $ 5.80 $ 4.98 $ 4.53
Diluted EPS

Dilutive effect of stock options and restricted stock
663 534 734
Income available to common stockholders
$ 241,051 $ 211,543 $ 198,637 42,235 42,970 44,624 $ 5.71 $ 4.92 $ 4.45

(in thousands, except per share data)	Net Income (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
For the year ended August 31, 2018
Basic EPS
Income available to common stockholders	$	267,085		38,733	$	6.90
Diluted EPS
Dilutive effect of stock options and restricted stock				644
Income available to common stockholders plus assumed conversions	$	267,085		39,377	$	6.78
For the year ended August 31, 2017
Basic EPS
Income available to common stockholders	$	258,259		39,444	$	6.55
Diluted EPS
Dilutive effect of stock options and restricted stock				198
Income available to common stockholders plus assumed conversions	$	258,259		39,642	$	6.51
For the year ended August 31, 2016
Basic EPS
Income available to common stockholders	$	338,815		40,880	$	8.29
Diluted EPS
Dilutive effect of stock options and restricted stock				485
Income available to common stockholders plus assumed conversions	$	338,815		41,365	$	8.19

Dilutive potential common shares consist of stock options and unvested restricted ~~stock. There were 88,090~~ stock ~~options excluded from the fiscal 2015 calculation of diluted earnings per share because their inclusion would have been anti-dilutive.~~awards. There were no stock options excluded from the ~~fiscal 2014~~Fiscal 2018 calculation of diluted ~~earnings per share while 6,408~~EPS. There were 704,786 and 507,658 stock options ~~were~~ excluded from ~~the~~ fiscal ~~2013 calculation.~~2017 and 2016 calculations of diluted EPS, respectively, because their inclusion would have been anti-dilutive.

As of August 31, ~~2015, 2014, 2013, 478,945, 380,653~~2018, 2017 and ~~1,202,685, respectively,~~2016, the number of performance-based stock options ~~were~~ excluded from the calculation of diluted ~~earnings per share~~.EPS was 249,443, 415,061 and 782,843, respectively. Performance-based stock options are omitted from the calculation of diluted ~~earnings per share~~EPS until the performance criteria ~~have been met.~~is considered probable of being achieved.

14. STOCKHOLDERS’ EQUITY

13.~~STOCKHOLDERS’ EQUITY~~Preferred Stock

~~Preferred Stock~~

At August 31, ~~2015~~2018 and ~~2014,~~2017, there were 10,000,000 shares of preferred stock ($.01 par value per share) authorized, of which no shares were issued and outstanding. FactSet’s Board of Directors may from time to time authorize the issuance of one or more series of preferred stock and, in connection with the creation of such series, determine the characteristics of each such series including, without limitation, the preference and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions of the series.

Common Stock

At August 31, ~~2015~~2018 and ~~2014,~~2017, there were 150,000,000 shares of common stock ($.01 par value per share) authorized, of which ~~50,328,423~~39,264,849 and ~~49,110,218~~51,845,132 shares were issued, respectively. The authorized shares of common stock are issuable for any proper corporate purpose, including future stock splits, stock dividends, acquisitions, raising equity capital or to adopt additional employee benefit plans.

Treasury Stock

AtOn January 31, 2018, FactSet retired 13,292,689 shares of treasury stock. These retired shares are now included in the Company’s pool of authorized but unissued shares. The retired treasury stock was initially recorded using the cost method and had a carrying value of $1.7 billion at January 31, 2018. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct its par value from common stock ($0.1 million), reduce additional paid-in capital (“APIC”) by the average amount recorded in APIC when stock was originally issued ($186.7 million) and any remaining excess of cost as a deduction from retained earnings ($1.5 billion). As of August 31, ~~2015 and 2014,~~2018, there were ~~9,011,521 and 7,317,416~~1,072,263 shares of treasury stock (at cost) outstanding, ~~respectively. As~~ a ~~result, 41,316,902 and 41,792,802 shares of FactSet common stock were outstanding at August 31, 2015 and 2014, respectively.~~

~~Share Repurchase Program~~

On December 15, 2014, the Company’s Board of Directors approved a $300.0 million expansion of the existing share repurchase program. During fiscal 2015, the Company repurchased 1,689,337 shares for $252.8 million leaving $134.2 million authorized for future share repurchasesdecrease compared to 12,822,100 as of August 31, ~~2015. During fiscal 2014,~~2017 due to the ~~Company repurchased 2,489,993 shares for $275.4 million. At August~~aforementioned treasury stock retirement on January 31, ~~2014, $87.0 million remained authorized for future share repurchases.~~2018.

Share Repurchase Program

Repurchases will be made from time to time in the open market and privately negotiated transactions, subject to market conditions. During fiscal 2018, the Company repurchased 1,534,398 shares for $302.4 million compared to 1,554,822 shares for $252.8 million in fiscal 2017.

On March 26, 2018, the Board of Directors of FactSet approved a $300.0 million expansion to the existing share repurchase program. Subsequent to this expansion $241.7 million remain authorized for future share repurchases as of August 31, 2018. No minimum number of shares to be repurchased has been fixed. There is no timeframe to complete the ~~share~~ repurchase program and it is expected that share repurchases will be paid ~~for~~ using existing and future cash generated by operations.

Restricted Stock

Restricted stock awards entitle the holder to shares of common stock as the awards vest over time. During fiscal ~~2015, 94,870~~2018, 26,599 shares of previously granted restricted stock awards vested and were included in common stock outstanding as of August 31, ~~2015~~2018 (less ~~23,192~~8,070 shares repurchased from employees at a cost of ~~$3.1~~$1.5 million to cover their cost of taxes upon vesting of the restricted stock). During fiscal ~~2014, 135,205~~2017, 132,194 shares of previously granted restricted stock awards vested and were included in common stock outstanding as of August 31, ~~2014~~2017 (less ~~41,093~~49,771 shares repurchased from employees at a cost of ~~$4.4~~$7.8 million to cover their cost of taxes upon vesting of the restricted stock). ~~During fiscal 2014, 149,741 restricted stock awards vested.~~

Dividends

The Company’s Board of Directors declared the following dividends on our common stock during the periods presented:

Declaration Date

Dividends Per
Share of
Common Stock

Type
Record Date

Total $ Amount
(in thousands)

Payment Date
August 10, 2015
$ 0.44
Regular (cash)
August 31, 2015
$ 18,179
September 15, 2015
May 12, 2015
$ 0.44
Regular (cash)
May 29, 2015
$ 18,274
June 16, 2015
February 11, 2015
$ 0.39
Regular (cash)
February 27, 2015
$ 16,236
March 17, 2015
November 12, 2014
$ 0.39
Regular (cash)
November 28, 2014
$ 16,216
December 16, 2014
August 14, 2014
$ 0.39
Regular (cash)
August 29, 2014
$ 16,299
September 16, 2014
May 5, 2014
$ 0.39
Regular (cash)
May 30, 2014
$ 16,386
June 17, 2014
February 11, 2014
$ 0.35
Regular (cash)
February 28, 2014
$ 14,827
March 18, 2014
November 14, 2013
$ 0.35
Regular (cash)
November 29, 2013
$ 15,046
December 17, 2013
August 15, 2013
$ 0.35
Regular (cash)
August 31, 2013
$ 15,164
September 17, 2013
May 14, 2013
$ 0.35
Regular (cash)
May 31, 2013
$ 15,413
June 18, 2013
February 21, 2013
$ 0.31
Regular (cash)
February 28, 2013
$ 13,510
March 19, 2013
November 15, 2012
$ 0.31
Regular (cash)
November 30, 2012
$ 13,746
December 18, 2012

Year Ended	Dividends per Share of Common Stock		Record Date	Total amount (in thousands)		Payment Date
Fiscal 2018
First Quarter	$	0.56	November 30, 2017	$	21,902	December 19, 2017
Second Quarter	$	0.56	February 28, 2018	$	21,799	March 20, 2018
Third Quarter	$	0.64	May 31, 2018	$	24,566	June 19, 2018
Fourth Quarter	$	0.64	August 31, 2018	$	24,443	September 18, 2018

Fiscal 2017
First Quarter	$	0.50	November 30, 2016	$	19,852	December 20, 2016
Second Quarter	$	0.50	February 28, 2017	$	19,709	March 21, 2017
Third Quarter	$	0.56	May 31, 2017	$	21,951	June 20, 2017
Fourth Quarter	$	0.56	August 31, 2017	$	21,853	September 19, 2017

All of the above cash dividends were paid from existing cash resources. Future dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Company and is subject to final determination by the Company’s Board of Directors.

14.15. EMPLOYEE STOCK OPTION AND RETIREMENT PLANS

Stock Options Awards

~~The~~On December 19, 2017, the Company’s stockholders approved the amended and restated FactSet Research Systems Inc. 2004 Stock Option and Award Plan, as Amended and Restated, which was renamed the Stock Option and Award Plan, as Amended and Restated (the ~~“Option~~“Long Term Incentive Plan” or “LTIP”). As part of the approved amendment, an additional 5,750,000 shares of common stock were added to the LTIP’s share reserve and the expiration date was extended to December 19, 2027. The LTIP provides for the grant of share-based awards, including stock options and restricted stock awards to employees of FactSet. ~~The expiration date of the Option Plan is December 14, 2020.~~ Stock options granted under the ~~Option Plan~~LTIP expire ~~either seven or~~not more than ten years from the date of grant and the majority vest ratably over a period of five years. Options become vested and exercisable provided the employee continues employment with the Company through the applicable vesting date and remain exercisable until expiration or cancellation. Options are not transferable or assignable other than by will or the laws of descent and distribution. During the grantee’s lifetime, the options may be exercised only by the grantee.

As of August 31, 2018, a total of 3,143,417 stock options were outstanding at a weighted average exercise price of $153.05. Unamortized stock-based compensation of $59.7 million is expected to be recognized as stock-based compensation expense over the remaining weighted average vesting period of 3.1 years.

Stock Option Activity

In fiscal years ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, FactSet granted 610,628, 1,026,984 and 1,195,649 stock options, ~~to purchase 828,652, 391,478 and 1,674,966 shares of common~~respectively. These stock ~~respectively, were granted to existing employees and non-employee directors of the Company. These~~ options have a weighted average ~~grant date~~ exercise price of ~~$141.79, $106.73~~$190.65, $157.09 and ~~$92.21 for fiscal years 2015, 2014 and 2013,~~$168.14 to existing employees of the Company, respectively.

A summary of stock option activity is as follows:

(in thousands, except per share data)

Number
Outstanding

Weighted Average
Exercise Price Per Share

Balance at August 31, 2012
6,083 $ 64.76
Granted – non performance-based
645 92.22
Granted – performance-based
1,011 92.22
Granted – non-employee Directors grant
19 91.06
Exercised
(2,286
)
52.25
Forfeited⁽¹⁾
(743
)
93.84
Balance at August 31, 2013
4,729 $ 75.95
Granted – non performance-based
174 103.36
Granted – performance-based
203 109.56
Granted – non-employee Directors grant
14 107.65
Exercised
(789
)
57.56
Forfeited⁽²⁾
(849
)
91.98
Balance at August 31, 2014
3,482 $ 79.67
Granted – non performance-based
677 140.49
Granted – performance-based
138 148.52
Granted – non-employee Directors grant
14 138.48
Exercised
(1,060
)
63.03
Forfeited
(134
)
106.01
Balance at August 31, 2015
3,117 $ 100.71

⁽¹⁾

~~In November 2011,~~~~FactSet~~ granted 665,551 performance-based employee stock options. None of these performance-based stock options granted vested because FactSet did not achieve certain performance levels during the two fiscal years ended August 31, 2013. As such, these stock options were recorded as forfeitures in August 2013.

⁽²⁾

In November 2012, FactSet granted 1,011,510 performance-based employee stock options. Based upon the actual growth in both organic ASV and diluted EPS during the two fiscal years ended August 31, 2014, 20% of the shares became eligible to vest on Au~~gust 31, 2014 and the remaining~~~~were recorded as forfeitures in~~~~August~~~~2014.~~

(in thousands, except per share data)	Number Outstanding			Weighted Average Exercise Price Per Share
Balance at August 31, 2015		3,117		$	100.71
Granted – non performance-based		622		$	171.18
Granted – performance-based		551		$	165.59
Granted – non-employee Directors grant		23		$	146.82
Exercised		(681	)	$	71.52
Forfeited		(268	)	$	113.70
Balance at August 31, 2016		3,364		$	129.54
Granted – non performance-based		713		$	152.89
Granted – performance-based		291		$	166.29
Granted – non-employee Directors grant		24		$	170.24
Exercised		(487	)	$	86.17
Forfeited		(539	)	$	160.31
Balance at August 31, 2017		3,366		$	139.29
Granted – non performance-based		575		$	190.14
Granted – performance-based		17		$	200.20
Granted – non-employee Directors grant		19		$	197.75
Exercised		(622	)	$	113.73
Forfeited		(212	)	$	158.14
Balance at August 31, 2018		3,143		$	153.05

Stock Options Outstanding and Exercisable

The following table summarizes ranges of outstanding and exercisable options as of August 31, ~~2015~~2018 (in thousands, except per share data and the weighted average remaining years of contractual life):

Outstanding

Exercisable

Range of Exercise Prices Per Share

Number Outstanding

Weighted Average
Remaining Years
of Contractual Life

Weighted
Average
Exercise Price
Per Share

Aggregate Intrinsic Value

Number Exercisable
Weighted
Average Exercise Price Per Share
Aggregate
Intrinsic
Value

$35.80 – $63.09 255 1.0 $ 54.62 $ 26,340 255 $ 54.62 $ 26,340
$66.46 – $66.81
351 1.2 $ 66.47 $ 32,098 351 $ 66.47 $ 32,098
$87.26 – $90.92
372 5.6 $ 90.14 $ 25,213 169 $ 89.44 $ 11,574
$91.06 – $92.22
654 7.1 $ 92.19 $ 42,986 336 $ 92.20 $ 22,083
$94.84 – $96.10
326 6.0 $ 94.88 $ 20,550 227 $ 94.85 $ 14,317
$102.01 – $110.31
358 8.2 $ 106.88 $ 18,273 14 $ 107.64 $ 704
$131.31 – $139.02
484 9.1 $ 131.91 $ 12,586 — $ — $ —
$148.52 – $166.74
317 9.6 $ 157.21 $ 225 — $ — $ —
Total Fiscal 2015
3,117 6.3 $ 100.71 $ 178,271 1,352 $ 78.70 $ 107,116

			Outstanding								Exercisable
Range of Exercise Prices Per Share			Number Outstanding		Weighted Average Remaining Years of Contractual Life		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Number Exercisable		Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
$87.26	-	$92.22		333		3.9	$	91.75	$	45,794		333	$	91.75	$	45,794
$94.84	-	$110.31		180		4.1	$	99.24	$	23,459		137	$	98.18	$	17,914
$131.31	-	$148.52		403		6.1	$	134.93	$	38,071		173	$	131.54	$	16,889
$150.81	-	$152.28		637		8.1	$	152.25	$	49,139		124	$	152.23	$	9,551
$159.14	-	$170.24		627		7.8	$	165.23	$	40,227		110	$	163.55	$	7,262
$171.22	-	$175.20		383		7.2	$	175.06	$	20,816		145	$	175.06	$	7,887
$189.98	-	$200.20		580		9.2	$	190.68	$	22,462		—	$	—	$	—

Total Fiscal 2018				3,143					$	239,9684		1,022			$	105,297

Prior Year Amounts
August 31, 2014 August 31, 2013

Number of
Shares

Weighted Average Exercise Price Per Share

Number of
Shares

Weighted Average
Exercise Price Per Share

Outstanding at fiscal year end
3,482 $ 79.67 4,729 $ 75.95
Exercisable at fiscal year end
1,899 $ 68.78 1,925 $ 59.70

The following table summarizes outstanding and exercisable options as of August 31, 2017 and 2016 (in thousands, except the weighted average exercise price per share):

			August 31, 2017				August 31, 2016
	Number of Shares		Weighted Average Exercise Price Per Share		Number of Shares		Weighted Average Exercise Price Per Share
Outstanding at fiscal year end		3,366	$	139.29		3,364	$	129.54
Exercisable at fiscal year end		918	$	105.14		970	$	89.42

The aggregate intrinsic value of in-the-money stock options exercisable at August 31, ~~2015~~2018 and ~~2014~~2017 was ~~$107.1~~$105.3 million and ~~$111.3~~$49.7 million, respectively. Aggregate intrinsic value represents the difference between the Company’s closing stock price of ~~$157.92~~$229.39 at August 31, ~~2015~~2018 and the exercise price multiplied by the number of options exercisable as of that date. The weighted average remaining contractual life of stock options exercisable at August 31, ~~2015~~2018 and ~~2014~~2017 was ~~3.9~~5.6 years and ~~3.4~~5.1 years, respectively. The total pre-tax intrinsic value of stock options exercised during fiscal ~~2015, 2014~~2018, 2017 and ~~2013~~2016 was ~~$92.7~~$50.1 million, ~~$44.0~~$38.0 million and ~~$99.1~~$60.8 million, respectively.

Performance-based Stock Options

Performance-based stock options require management to make assumptions regarding the likelihood of achieving Company performance targets. The number of performance-based options that vest will be predicated on the Company achieving performance levels during the measurement period subsequent to the date of grant. Dependent on the financial performance levels attained by FactSet, a percentage of the performance-based stock options will vest to the grantees of those stock options. However, there is no current guarantee that such options will vest in whole or in part.

~~July 2012~~February 2015 Performance-based Option Grant Review

In ~~July 2012,~~connection with the acquisition of Code Red, FactSet granted ~~241,546~~68,761 performance-based ~~employee~~ stock options ~~which~~during the second quarter of fiscal 2015 that are eligible to cliff vest ~~in 20% tranches depending upon future StreetAccount user growth through August 31, 2017. During~~based on a four-year measurement period ending February 28, 2019. In the ~~fourth~~second quarter of fiscal ~~2013,~~2018, FactSet modified the ~~first growth target as outlined within the terms~~vesting criteria of the grant, which resulted in 40% of the options deemed eligible to vest, with the remaining options forfeited. No cumulative catch-up adjustment was ~~achieved, thus 20% or 48,314~~required because FactSet had expected the 40% level to be achieved. The option holders must remain employed by FactSet through February 28, 2019 for the options ~~vested on August 31, 2013. The second 20% tranche vested on August 31, 2014 as a result of accelerated expansion of Street Account users during fiscal 2014. During the fourth quarter of fiscal 2015,the third growth target was achieved, thus the third 20% tranche vested on August 31, 2015.~~to vest. As of August 31, ~~2015, the Company estimates that the fourth 20% tranche will vest by August 31, 2017, resulting in~~2018, total unamortized stock-based compensation ~~expense~~ of ~~$0.6~~$0.4 million towill be recognized as expense over the remaining vesting period of ~~2.0~~0.4 years.

January 2017 Performance-based Option Grant Review

In connection with the acquisition of Vermilion, FactSet granted 61,744 performance-based stock options in January 2017. These performance-based options will vest 40% on the second anniversary date of the grant and 20% on each subsequent anniversary date if certain Vermilion revenue and operating income targets are achieved by November 30, 2018. The option holders must also remain employed by FactSet for the options to be eligible to vest. As of August 31, 2018, FactSet does not believe these growth targets are probable of being achieved, and as such, no stock-based compensation expense is expected to be recognized in connection with these performance-based options. A change ~~up or down,~~ in the actual financial performance levels achieved by ~~StreetAccount~~Vermilion in future fiscal years could result in the following changes to the current estimate of the vesting percentage and related ~~expense (in thousands):~~

Vesting
Percentage

Cumulative
Catch-up Adjustment*

Remaining Expense
to be Recognized

Fourth 20% (current expectation)
$ 0 $ 619
Fifth 20%
$ 1,216 $ 1,003

* Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of August 31, 2015. expense:

(in thousands, except vesting percentage data)

Vesting Percentage

Cumulative

Catch-up Adjustment⁽¹⁾

Remaining Expense

to be Recognized

0% (current expectation)

—

100%

613

1,272

(1)

Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of August 31, 2018.

~~November 2012 Annual Employee~~

June 2017 Performance-based Option Grant Review

In November 2012, FactSet granted 1,011,510 performance-based employee stock options. The number of performance-based options that would become eligible to vest was based upon the Company achieving performance levels for both organic ASV and diluted earnings per share during the two fiscal years ended August 31, 2014. Based upon the actual growth in organic ASV and diluted EPS through August 31, 2014, 20%, or 185,014 (net of options forfeited through the end of fiscal 2014), of the previously granted shares became eligible to vest on August 31, 2014. The remaining 80% of the performance-based options previously granted were recorded as forfeitures in the fourth quarter of fiscal 2014. As of the end of fiscal 2015, total unamortized stock-based compensation expense of $0.9 million will be recognized over the remaining vesting period of 2.1 years in connection with this grant.

~~February 2015 Performance-based Option Grant Review~~

In connection with the acquisition of ~~Code Red during the second quarter of fiscal 2015,~~BISAM, FactSet granted ~~137,522~~206,417 performance-based stock ~~options.~~options in June 2017. These performance-based options ~~are eligible to~~will vest ~~four years from~~40% on the second anniversary date of the grant and 20% on each subsequent anniversary date if certain ~~Code Red ASV~~BISAM revenue and operating ~~margin~~income targets are achieved ~~over the measurement period.~~by March 31, 2019. The option holders must also remain employed by FactSet for the options to be eligible to vest. Of the total grant, 68,761 performance-based options are eligible for vesting based on achieving the growth targets over a four year measurement period ending February 28, 2019 and the remaining 68,761 options are eligible to cliff vest based on a two year measurement period ending February 28, 2017. As of August 31, ~~2015, total unamortized~~2018, FactSet does not believe these growth targets are probable of being achieved, and as such, no stock-based compensation ~~of $2.1 million will~~expense is expected to be recognized ~~as expense over the remaining vesting period of 3.4 years.~~in connection with these performance-based options. A change ~~up or down,~~ in the actual financial performance levels achieved by ~~Code Red~~BISAM in future fiscal years could result in the following changes to the current estimate of the vesting percentage and related ~~expense (in thousands):~~expense:

Vesting
Percentage

Cumulative
Catch-up Adjustment*

Remaining Expense
to be Recognized

0%
$ (338 ) $ 0
10%
$ (253 ) $ 516
40% (current expectation)
$ 0 $ 2,063
70%
$ 253 $ 3,609
100%
$ 506 $ 5,156

(in thousands, except vesting percentage data) Vesting Percentage	Cumulative Catch-up Adjustment⁽¹⁾		Remaining Expense to be Recognized
0%(current expectation)	$	—	$	—
80%	$	1,658	$	5,449
90%	$	1,866	$	6,130
100%	$	2,073	$	6,811

* Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of August 31, 2015.
(1)
Amounts represent the cumulative catch-up adjustment to be recorded if there was a change in the vesting percentage as of August 31, 2018.

~~Other Performance-based Option Grants~~

In connection with the acquisitions of Matrix and Revere, FactSet granted 165,949 and 36,695 performance-based stock options, respectively, during fiscal 2014. The performance-based options granted in connection with the acquisition of Matrix will vest only if ASV and operating margin targets related to the Matrix business are met during a five year measurement period ending December 23, 2018, and the option holders remain employed by FactSet. As of August 31, 2015 FactSet does not believe these targets are probable of being achieved, and as such, no stock-based compensation expense is expected to be realized in connection with these options. Of the 36,695 performance-based stock options granted in connection with the Revere acquisition, 18,553 options became eligible to vest based upon the achievement of certain ASV and operating margins during the measurement period ending August 31, 2015. This results in unamortized stock-based compensation expense of $0.4 million to be recognized over the remaining vesting period of 3.0 years. Of the remaining 18,142 performance-based options previously granted, 6,184 were recorded as forfeitures in the fourth quarter of fiscal 2015 while the remaining 11,958 vest 80% after four years if the measurement criterion is achieved over the four year period ending August 31, 2017.

Restricted Stock and Stock Unit Awards

The Company’s Option Plan plans permit the issuance of restricted stock and restricted stock units. Restricted stock awards are subject to continued employment over a specified period.

Restricted Stock and Stock Unit Awards Activity

In fiscal years ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, FactSet granted ~~54,862, 204,124~~3,497, 62,400 and ~~131,702~~97,319 restricted stock awards to employees of the Company, respectively. These awards have a weighted average grant date fair value of ~~$138.23, $101.95~~$189.28, $158.26 and ~~$85.80~~$159.64 for fiscal years ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

As of August 31, ~~2015,~~2018, a total of ~~313,407~~143,003 shares of restricted stock and restricted stock units were unvested and outstanding, which results in unamortized stock-based compensation of ~~$20.5~~$12.0 million to be recognized as stock-based compensation expense over the remaining vesting period of ~~3.2~~3.0 years.

A summary of restricted stock award activity is as follows:

(in thousands, except per award data)

Number
Outstanding

Weighted Average Grant
Date Fair Value Per Award

Balance at August 31, 2012
383 $ 71.34
Granted (restricted stock and stock units)
132 85.80
Vested⁽¹⁾
(150 ) 62.34
Canceled/forfeited
(7 ) 81.38
Balance at August 31, 2013
358 $ 80.43
Granted (restricted stock and stock units)
204 101.95
Vested⁽²⁾
(135 ) 84.48
Canceled/forfeited
(59 ) 86.39
Balance at August 31, 2014
368 $ 89.77
Granted (restricted stock and stock units)
55 138.23
Vested⁽³⁾
(95 ) 70.94
Canceled/forfeited
(15 ) 101.04
Balance at August 31, 2015
313 $ 103.34
(in thousands, except per award data)

Number Outstanding

Weighted Average Grant
Date Fair Value Per Award

Balance at August 31, 2015
313 $ 103.34
Granted (restricted stock and stock units)
97 $ 159.64
Vested⁽¹⁾
(69 ) $ 85.04
Canceled/forfeited
(79 ) $ 112.51
Balance at August 31, 2016
262 $ 126.27
Granted (restricted stock and stock units)
62 $ 158.26
Vested⁽²⁾
(132 ) $ 123.28
Canceled/forfeited
(10 ) $ 130.32
Balance at August 31, 2017
182 $ 138.62
Granted (restricted stock and stock units)
4 $ 189.28
Vested⁽³⁾
(27 ) $ 155.95
Canceled/forfeited
(16 ) $ 116.29
Balance at August 31, 2018
143 $ 139.34

⁽¹⁾
~~Of the total 149,741~~The 69,244 restricted stock awards that vested during fiscal 2013, 87,758 related to awards granted on October 23, 2009. These restricted stock awards cliff vested 60% after three years (on October 23, 2012) and 40% after five years (on October 23, 2014). An additional 55,572 awards that vested in fiscal 2013 related to awards granted on February 9, 2010 which cliff vested 100% after three years (on February 9, 2013). The remaining 6,411 restricted stock awards that vested were previously granted between June 2010 and July 2011 and vesting occurred when certain ASV targets were met in fiscal 2013.
⁽²⁾
2016 ~~The 135,205 restricted stock awards that vested during fiscal 2014~~ were comprised of: ~~62,544~~37,079 of awards relating to restricted stock granted on November 8, 2010 ~~which cliff vested 60% after three years (on November 8, 2013) with the~~ (remaining 40% ~~cliff vesting after five years (on November 8, 2015); 29,087 of awards granted on April 14, 2011, which vested 100% after three years on April 14, 2014; 26,344~~) and 14,683 restricted stock awards that were granted on April 8, 2013, which cliff vest 20% annually upon the anniversary date of the ~~grant; and 17,230~~grant. Additionally, 17,482 awards vested related to other grants.
⁽²⁾
The 132,194 restricted stock awards that vested during fiscal 2017 were comprised of: 73,522 of awards relating to restricted stock granted on ~~February 9, 2010~~November 1, 2013, which cliff vested ~~50%~~60% after ~~four~~three years, ~~(on February 9, 2014).~~17,328 of awards relating to restricted stock granted on October 16, 2015, which vested 20% annually upon the anniversary date of the grant and 30,162 of awards relating to restricted stock granted on October 16, 2015, which were modified to accelerate vest 100% in conjunction with employee severance. Additionally, 11,182 awards vested related to other grants.

⁽³⁾
The ~~The~~~~94,870~~26,599 restricted stock awards that vested during fiscal ~~201~~52018 were comprised ~~of:~~of~~53,495~~:9,765 of awards ~~granted on~~~~October 23, 2014~~,~~which~~~~cliff vested 60% after three years (on October 23, 2012) and 40% after five years (on October 23, 2014~~);~~14,683~~relating to restricted stock ~~awards that were~~ granted on ~~April 8, 2013,~~October 16, 2015 and 8,600 of awards relating to restricted stock granted on June 30, 2017 which ~~cliff~~ vest at a rate of 20% annually upon the anniversary date of the ~~grant;~~grant~~17,228~~, respectively. Additionally, 8,234 awards ~~relating~~vested related to ~~restricted stock granted on February 9, 2010~~other grants.~~; and 9,464~~~~restricted stock awards that were previously granted between~~~~November 2013 and November 2014~~.

Share-based Awards Available for Grant

A summary of share-based awards available for grant is as ~~follows (in thousands):~~follows:

Share-based Awards
Available for Grant under the
Employee Stock Option Plan

Share-based Awards
Available for Grant under the
Non-Employee Stock Option Plan

Balance at August 31, 2012
4,340 126
(in thousands)

Share-based Awards
Available for Grant under the
Employee Stock Option Plan

Share-based Awards
Available for Grant under the
Non-Employee Stock Option Plan

Balance at August 31, 2015
2,441 88
Granted – non performance-based options
(645 ) — (622 ) —
Granted – performance-based options
(1,011 ) — (551 ) —
Granted – non-employee Directors grant
— (19 ) — (22 )
Restricted stock awards granted⁽¹⁾
(329 ) — (243 ) —
Share-based awards canceled/forfeited⁽²⁾
761 — 466 —
Balance at August 31, 2013
3,116 107
Balance at August 31, 2016
1,491 66
Granted – non performance-based options
(174 ) — (713 ) —
Granted – performance-based options
(203 ) — (291 ) —
Granted – non-employee Directors grant
— (14 ) — (24 )
Restricted stock awards granted⁽¹⁾
(510 ) — (156 ) —
Share-based awards canceled/forfeited⁽²⁾
993 9 566 —
Balance at August 31, 2014
3,222 102
Balance at August 31, 2017
897 42
Increase in the number of shares available for issuance
5,750 250
Granted – non performance-based options
(677 ) — (575 ) —
Granted – performance-based options
(138 ) — (17 ) —
Granted – non-employee Directors grant
— (14 ) — (19 )
Restricted stock awards granted⁽¹⁾
(137 ) — (9 ) —
Share-based awards canceled/forfeited⁽²⁾
171 — 252 9
Balance at August 31, 2015
2,441 88
Balance at August 31, 2018
6,298 282

⁽¹⁾
Each restricted stock award granted is equivalent to 2.5 shares granted under the Company’sOption Plan.

⁽²⁾
Under the Company’sOptionPlan, for each restricted stock award canceled/forfeited, an equivalent of 2.5 shares is added back to the available share-based awards balance.

Employee Stock Purchase Plan

AtOn December 19, 2017, the ~~2014 Annual Meeting of Stockholders of FactSet held on December 16, 2014, the~~Company’s stockholders ~~of FactSet voted on~~approved and ~~approved the Amended~~amended and ~~Restated FactSet Research Systems Inc.~~restated 2008 Employee Stock Purchase Plan, ~~(the “Purchase Plan”), including~~as Amended and Restated, which was renamed the ~~reservation of an additional 500,000 shares of common stock for issuance thereunder. The amendment and restatement of the~~Employee Stock Purchase Plan, ~~was approved by FactSet’s Board of Directors on October 23, 2014~~as Amended and became effective with stockholder approval on December 16, 2014. As a result of such stockholder approval, the Purchase Plan was amended and modified to increase the maximum number of shares of common stock authorized for issuance over the term of the Purchase Plan by 500,000 shares. There is no expiration date for the Purchase Plan.
Restated (the “ESPP”). Shares of FactSet common stock may be purchased by eligible employees under ~~the Purchase Plan~~ESPP in three-month intervals at a purchase price equal to at least 85% of the lesser of the fair market value of the Company’s common stock on either the first day or the last day of each three-month offering period. Employee purchases may not exceed 10% of their gross compensation and a $25,000 contribution limit during an offering period.

During fiscal ~~2015,~~2018, employees purchased ~~63,265~~64,230 shares at a weighted average price of $160.34 as compared to ~~74,889~~75,372 shares inat a weighted average price of $136.34 for fiscal ~~2014 and 75,281 shares in fiscal 2013.~~2017. At August 31, ~~2015, 481,616~~2018, the ESPP had 268,942 shares ~~were~~ reserved for future ~~issuance under the Purchase Plan.~~issuance.

401(k) Plan

The Company established aits 401(k) Plan ~~(the “401(k) Plan”)~~ in fiscal 1993. The 401(k) Plan is a defined contribution plan covering all full-time, U.S. employees of the Company and is subject to the provisions of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of ~~1986.~~1986 (“IRC”). Each year, participants may contribute up to 60% of their eligible annual compensation, subject to annual limitations established by the ~~Internal Revenue Code.~~IRC. The Company matches up to 4% of employees’ earnings, capped at the ~~IRS~~Internal Revenue Service annual maximum. Company matching contributions are subject to a ~~five year~~five-year graduated vesting schedule. All full-time, U.S. employees are eligible for the matching contribution by the Company. The Company contributed ~~$8.6~~$11.6 million, ~~$7.7~~$10.1 million, and ~~$7.5~~$9.7 million in matching contributions to employee 401(k) accounts during fiscal ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, respectively.

15.16. STOCK-BASED COMPENSATION

The Company recognized total stock-based compensation expense of ~~$26.4~~$31.5 million, ~~$22.9~~$34.2 million and ~~$40.0~~$29.8 million in fiscal ~~2015, 2014,~~2018, 2017 and ~~2013,~~2016, respectively. As of August 31, ~~2015, $60.5~~2018, $71.7 million of total unrecognized compensation expense related to non-vested awards is expected to be recognized over a weighted average period of ~~3.4~~3.0 years. There was no stock-based compensation capitalized as of August 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

Employee Stock Option Fair Value Determinations

The Company utilizes the lattice-binomial option-pricing model (“binomial model”) to estimate the fair value of new employee stock option grants. The Company’s determination of fair value of stock option awards on the date of grant using the binomial model is affected by the Company’s stock price as well as assumptions regarding a number of variables. These variables include but are not limited to the Company’s expected stock price volatility over the term of the awards, interest rates, option forfeitures and employee stock option exercise behaviors.

Q1 ~~2015~~ 2018	~~462,913~~553,942 non performance-based employee stock options were granted at a weighted average exercise price of ~~$131.31~~$189.98 and a weighted average estimated fair value of ~~$37.67~~$48.27 per share.
Q2 ~~2015~~ 2018	25,075 non performance-based employee stock options and 137,522 performance-based employee stock options were granted at a weighted average exercise price of $147.05 and a weighted average estimated fair value of $43.05 per share.
~~Q3 2015~~	~~61,210~~15,363 non performance-based employee stock options were granted at a weighted average exercise price of ~~$159.14~~$192.11 and a weighted average estimated fair value of ~~$44.95~~$48.82 per share.
~~Q4 2015~~Q3 2018	~~128,090~~There were no employee stock options granted during the three-month ended May 31, 2018.
Q4 2018	5,848 non performance-based employee stock options and 16,512 performance-based employee stock options were both granted at a weighted average exercise price of $200.20 with a weighted average estimated fair value of $50.87 per share.
Q1 2017	671,263 non performance-based employee stock options and 22,460 performance-based employee stock options were both granted at a weighted average exercise price of $152.51 with a weighted average estimated fair value of $39.60 per share.
Q2 2017	61,744 performance-based employee stock options were granted at a weighted average exercise price of $169.16 and a weighted average estimated fair value of $43.81 per share.
Q3 2017	11,604 non performance-based employee stock options were granted at a weighted average exercise price of ~~$165.02~~$163.05 and a weighted average estimated fair value of ~~$54.10~~$42.23 per share.
~~Q1 2014~~ Q4 2017	~~35,508~~29,650 non performance-based employee stock options and ~~36,695~~206,417 performance-based employee stock options were granted at a weighted average exercise price of ~~$109.49~~$165.75 and a weighted average estimated fair value of ~~$31.78~~$42.93 per share.
~~Q2 2014~~ Q1 2016	~~138,902~~513,785 non performance-based employee stock options and ~~165,949~~530,418 performance-based employee stock options were both granted at a weighted average exercise price of ~~$106.03 and~~$170.21 with a weighted average estimated fair value of ~~$29.14~~$46.62 per share.
~~Q3 2014~~ Q2 2016	~~There were no employee stock options granted during the third quarter of fiscal 2014.~~
~~Q4 2014~~	~~There were no employee stock options granted during the fourth quarter of fiscal 2014.~~
~~Q1 2013~~	635,308 non performance-based employee stock options and 1,011,510 performance-based employee stock options were granted at a weighted average exercise price of $92.22 and a weighted average estimated fair value of $26.87 per share.
~~Q2 2013~~	~~9,367~~4,073 non performance-based employee stock options were granted at ~~a weighted average~~an exercise price of ~~$92.55~~$150.81 and ~~a weighted average~~an estimated fair value of ~~$26.69~~$40.51 per share.
Q3 ~~2013~~ 2016	~~There were no~~103,903 non performance-based employee stock options were granted ~~during the third quarter~~at an exercise price of ~~fiscal 2013.~~$152.10 and an estimated fair value of $40.57 per share.
Q4 ~~2013~~ 2016	~~There were no~~20,911 performance-based employee stock options were granted ~~during the fourth quarter~~at an exercise price of ~~fiscal 2013.~~$171.22 and an estimated fair value of $47.82 per share.

The weighted average estimated fair value of employee stock options granted during fiscal ~~2015, 2014~~2018, 2017 and ~~2013~~2016 was determined using the binomial model with the following weighted average assumptions:

	2015			2014			2013			2018				2017				2016
Term structure of risk-free interest rate	0.01%	-	2.3%	0.01%	-	2.6%	0.16%	-	1.91%		1.28%	–	2.41%		0.07%	–	2.09%		0.07%	–	2.1%
Expected life (years)	5.8	-	9.4	7.6	-	7.8	7.6	-	7.8		7.4	–	7.4		7.4	–	8.1		7.3	–	8.1
Term structure of volatility	20%	-	31%	23%	-	33%	24%	-	33%		19%	–	29%		21%	–	30%		21%	–	30%
Dividend yield			1.32%			1.35%			1.30%			1.32%				1.18%				1.09%
Weighted average estimated fair value			$41.87			$29.64			$26.87			$48.39				$40.68				$46.08
Weighted average exercise price			$141.84			$106.69			$92.22			$190.42				$156.77				$168.55
Fair value as a percentage of exercise price			29.5%			27.8%			29.1%			25.4%				25.9%				27.3%

The risk-free interest rate assumption for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on a combination of historical volatility of the Company’s stock and implied volatilities of publicly traded options to buy FactSet common stock with contractual terms closest to the expected life of options granted to employees. The approach to utilize a mix of historical and implied volatility was based upon the availability of actively traded options on the Company’s stock and the Company’s assessment that a combination of implied volatility and historical volatility is best representative of future stock price trends. The Company uses historical data to estimate option exercises and employee termination within the valuation model. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding and is a derived output of the binomial model. The binomial model estimates employees exercise behavior based on the option’s remaining vested life and the extent to which the option is in-the-money. The binomial model estimates the probability of exercise as a function of these two variables based on the entire history of exercises and cancellations of all past option grants made by the Company.

Non-Employee Director Stock Option Fair Value Determinations

On December 19, 2017, the Company’s stockholders approved the Director Plan. The ~~2008 Non-Employee Directors’ Stock Option~~Director Plan ~~(the “Directors’ Plan”)~~ provides for the grant of share-based awards, including stock options, to non-employee directors of FactSet. ~~A total~~As part of ~~250,000~~the stockholder approval, the expiration date of the Director Plan was extended to December 19, 2027 and the number of shares ~~of FactSet common stock have been~~ reserved for issuance under the ~~Directors’ Plan. The expiration date~~Director Plan was increased by 250,000. As of ~~the Directors’ Plan is December 1, 2018.~~August 31, 2018, shares available for future grant were 282,398.

The Company utilizes the Black-Scholes model to estimate the fair value of new non-employee Director stock option grants. The Company’s determination of fair value of share-based payment awards on the date of grant is affected by the Company’s stock price as well as assumptions regarding a number of variables. These variables include but are not limited to the Company’s expected stock price volatility over the term of the awards, interest rates, option forfeitures and employee stock option exercise behaviors.

~~Fiscal 2015~~Fiscal 2018

On January ~~15, 2015,~~12, 2018, FactSet granted ~~13,842~~18,963 stock options to the Company’s non-employee ~~Directors at~~Directors. All the options granted on January 12, 2018, have a weighted average estimated fair value of ~~$28.18~~$38.76 per share, using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	~~1.45~~2.34	%
Expected life (years)	5.4
Expected volatility	2319.7	%
Dividend yield	~~1.30~~1.16	%

~~Fiscal 2014~~Fiscal 2017

On January ~~15, 2014,~~13, 2017, FactSet granted ~~14,424~~23,846 stock options to the Company’s non-employee Directors, atincluding one-time new director grants of 2,104 for both Malcolm Frank and Sheila B. Jordan, who were elected to FactSet’s Board of Directors on December 20, 2016. All the options granted on January 13, 2017, have a weighted average estimated fair value of ~~$27.04~~$35.65 per share, using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	~~1.66~~1.95	%
Expected life (years)	5.4
Expected volatility	2922.7	%
Dividend yield	~~1.35~~1.24	%

Fiscal ~~2013~~2016

On January 15, ~~2013,~~2016, FactSet granted ~~18,781~~22,559 stock options to the Company’s non-employee Directors, atincluding a one-time new director grant of 2,417 for Laurie Siegel, who was elected to FactSet’s Board of Directors on December 15, 2015. All the options granted on January 15, 2016, have a weighted average estimated fair value of ~~$24.23~~$31.03 per share, using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	~~0.89~~1.62	%
Expected life (years)	5.4
Expected volatility	3223.0	%
Dividend yield	~~1.30~~1.05	%

The risk-free interest rate assumption for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and non-employee director terminations within the valuation model. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts.

Restricted StockFair Value Determinations

Restricted stock granted to employees ~~entitle~~entitles the holder to shares of common stock as the award vests over time, but not to dividends declared on the underlying shares while the restricted stock is unvested. The grant date fair value of restricted stock awards ~~are~~is measured by reducing the grant date price of FactSet’s share by the present value of the dividends expected to be paid on the underlying stock during the requisite service period, discounted at the appropriate risk-free interest rate. Restricted stock awards are amortized to expense over the vesting period. During fiscal 2018, there were 3,497 restricted stock awards granted with a weighted average grant date fair value of $189.28 compared to 62,400 restricted stock awards granted with a weighted average grant date fair value of $158.26 in fiscal 2017.

~~Fiscal 2015~~

–Q1 2018

~~9,384 restricted stock units with a fair value of $127.88 were granted on November 3, 2014.~~

–

~~841~~961 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$124.18 were granted on November 3, 2014.~~$182.17 per share.

	–Q2 2018	~~15,070~~No restricted stock granted.
Q3 2018	No restricted stock granted.
Q4 2018	2,536 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$132.71 were granted on December 17, 2014.~~$191.97 per share.

–Q1 2017

~~1,724 restricted stock units with a fair value of $145.01 were granted on February 9, 2015.~~

–

~~21,294~~5,084 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$140.88 were granted on February 9, 2015.~~$151.63 per share.

–Q2 2017

~~397~~7,843 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$151.50 were granted on May 1, 2015.~~$161.31 per share.

	–Q3 2017	~~448~~No restricted stock granted.
Q4 2017	49,473 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$153.89 were granted on May 1, 2015.~~$158.46 per share.

–Q1 2016

~~5,704~~93,120 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$157.84 were granted on July 31, 2015.~~$159.46 per share.

~~Fiscal 2014~~

–Q2 2016

~~7,744~~No restricted stock ~~units with a fair value of $103.30 were granted on September 17, 2013.~~granted.

–Q3 2016

~~153,972~~255 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$102.22 were granted on November 1, 2013.~~$146.20 per share.

–Q4 2016

~~30,144~~3,944 shares of restricted stock ~~with~~were granted at a weighted average estimated fair value of ~~$102.84 were granted on December 23, 2013.~~

–

~~12,264 restricted stock units with a fair value of $95.45 were granted on February 3, 2014.~~

~~Fiscal 2013~~

–

~~131,702 restricted stock units granted on April 8, 2013 with a fair value of $85.80.~~$164.77 per share.

Employee Stock Purchase Plan Fair Value Determinations

During fiscal ~~2015,~~2018, employees purchased ~~63,265~~64,230 shares at a weighted average price of ~~$122.76~~$160.34 compared to ~~74,889~~75,372 shares at a weighted average price of ~~$89.28~~$136.34 in fiscal ~~2014~~2017 and ~~75,281~~73,072 shares at a weighted average price of ~~$80.77~~$131.14 in fiscal ~~2013.~~2016. Stock-based compensation expense recorded during fiscal ~~2015, 2014,~~2018, 2017 and ~~2013~~2016 relating to the employee stock purchase plan was ~~$1.5~~$1.6 million, ~~$1.3~~$2.1 million and ~~$1.2~~$1.9 million, respectively.

The Company uses the Black-Scholes model to calculate the estimated fair value for the employee stock purchase plan. The weighted average estimated fair value of employee stock purchase plan grants during fiscal years ~~2015, 2014~~2018, 2017 and ~~2013 were $24.05, $17.76~~2016, was $31.83, $28.16 and ~~$15.79~~$26.87 per share, respectively, with the following weighted average assumptions:

2015

2014

2013

Risk-free interest rate
0.03
%
0.04
%
0.07
%
Expected life (months)
3 3 3
Expected volatility
16.3
%
9.8
%
9.8
%
Dividend yield
1.15
%
1.38
%
1.38
%

2018

2017

2016

Risk-free interest rate
1.55
%
0.69
%
0.22
%
Expected life (months)
3 3 3
Expected volatility
10.19
%
8.6
%
10.7
%
Dividend yield
1.27
%
1.25
%
1.18
%

Accuracy of Fair Value Estimates

The Company is responsible for determining the assumptions used in estimating the fair value of its share-based payment awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include but are not limited to the Company’s expected stock price volatility over the term of the awards, interest rates, option forfeiture rates and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable.

16.17. 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 tax bases of assets and liabilities using currently enacted tax rates.

Provision for Income Taxes

The provision for income taxes is as ~~follows (in thousands):~~follows:

Years Ended August 31,	2015			2014			2013
										Years ended August 31,
(in thousands)										2018			2017			2016
U.S. operations	$	263,411		$	242,839		$	220,778		$	199,654		$	218,650		$	353,434
Non-U.S. operations		70,343			60,625			50,132			152,184			125,662			107,559
Income before income taxes	$	333,754		$	303,464		$	270,910		$	351,838		$	344,312		$	460,993

U.S. operations	$	88,147		$	81,998		$	61,328		$	65,778		$	65,403		$	106,671
Non-U.S. operations		4,556			9,923			10,945			18,975			20,650			15,507
Total provision for income taxes	$	92,703		$	91,921		$	72,273		$	84,753		$	86,053		$	122,178
Effective tax rate		27.8	%		30.3	%		26.7	%		24.1	%		25.0	%		26.5	%

The components of the provision for income taxes consist of the ~~following (in thousands):~~

Years Ended August 31,

2015

2014

2013

Current

U.S. federal
$ 82,885 $ 77,368 $ 52,625
U.S. state and local
4,419 3,972 3,309
Non-U.S.
6,368 10,350 11,188
Total current taxes
$ 93,672 91,690 $ 67,122
Deferred

U.S. federal
$ 720 $ 547 $ 5,036
U.S. state and local
123 111 358
Non-U.S.
(1,812
)
(427
)
(243
)
Total deferred taxes
$ (969
)
$ 231 $ 5,151
Total provision for income taxes
$ 92,703 $ 91,921 $ 72,273
following:

Years ended August 31,

(in thousands)

2018

2017

2016

Current

U.S. federal
$ 58,835 $ 58,057 $ 97,703
U.S. state and local
5,159 5,659 4,917
Non-U.S.
22,669 17,458 15,030
Total current taxes
$ 86,663 $ 81,174 $ 117,650

Deferred

U.S. federal
$ 2,079 $ 4,320 $ 3,915
U.S. state and local
(295 ) (77 ) 136
Non-U.S.
(3,694 ) 636 477
Total deferred taxes
$ (1,910 ) $ 4,879 $ 4,528
Total provision for income taxes
$ 84,753 $ 86,053 $ 122,178

The provision for income taxes differs from the amount of income tax determined by applying the U.S. statutory federal income tax rate to income before income taxes as a result of the following ~~factors (expressed as a percentage of income before income taxes):~~factors:

Years Ended August 31,

2015

2014

2013

Years ended August 31,

(expressed as a percentage of income before income taxes)

2018

2017

2016

Tax at U.S. Federal statutory tax rate
35.0
%
35.0
%
35.0
%
25.7
%
35.0
%
35.0
%

Increase (decrease) in taxes resulting from:

State and local taxes, net of U.S. federal income tax benefit
1.6 1.8 2.0 2.9 1.8 1.5
Foreign income at other than U.S. rates
(3.0
)
(2.9
)
(2.5
)
(3.2
)
(7.0
)
⁽³⁾ (5.0
)
⁽⁴⁾
Domestic production activities deduction
(2.2
)
(2.1
)
(2.6
)
(1.6
)
(2.1
)
(1.5
)

Income tax benefits from R&D tax credits
(2.7
)
(1.1
)
(4.1
)
(3.7
)
(3.3
)
(3.6
)

Income tax benefits from foreign tax credits
(0.3
)
(0.4
)
(1.2
)
— (0.3
)
(0.2
)

Share-Based Payments⁽¹⁾
(2.7
)
— —
One-time transition tax from TCJA⁽²⁾
6.6 — —
Other, net
(0.6
)
0.0 0.1 0.1 0.9 0.3
Effective tax rate
27.8
%
⁽¹⁾ 30.3
%
26.7
%⁽²⁾
24.1
%
25.0
%
26.5
%
⁽⁵⁾

⁽¹⁾
During the first quarter of fiscal 2018, FactSet adopted an accounting standard that requires all excess tax benefits or deficiencies related to share-based payments to be reported within the consolidated statement of incomethat were previously reported within equity. The adoption of this standard resulted in the recognition of $9.5 million of excess tax benefits to FactSet’s provision for income taxes during fiscal 2018.
⁽²⁾
The enactment of the TCJA resulted in a one-time transition tax expense of $23.2 million during the second quarter of fiscal 2018.
⁽³⁾
Includes a 200 basis point benefit as a result of FactSet’s global realignment. Effective September 1, 2016, FactSet realigned certain aspects of its global operations from FactSet Research Systems Inc., its U.S. parent company, to FactSet UK Limited, a U.K. operating company, to better position the Company to serve its growing client base outside the U.S. This realignment allows the Company to further implement strategic corporate objectives and helps achieve operational and financial efficiencies, while complementing FactSet’s increasing global growth and reach.
⁽⁴⁾
Includes a portion of the gain from the sale of the Market Metrics business that was not taxable in the UK
⁽⁵⁾
The fiscal ~~201~~52016 effective tax rate of ~~27.8~~%26.5% includesincome tax benefits of ~~$8.8~~$10.5 million primarily from the permanent reenactment of the U.S. FederalR&D Tax Credit ~~(the “U.S. Federal~~ (“R&D tax credit”) in December ~~2014,~~2015, finalizing ~~prior year~~the fiscal 2015 tax returns and other discrete ~~items~~items..
⁽²⁾
The ~~fiscal 2013 effective tax rate~~reenactment of ~~26.7% includes income tax benefits of $7.2 million~~~~primarily from~~the r~~eenactment of the U.S. Federal~~ R&D tax credit inwas retroactive to January ~~2013~~1, 2015, and~~finalizing prior year tax returns~~ eliminates the yearly uncertainty surrounding the extension of the credit.
FactSet’s effective tax rate is based on recurring factors and nonrecurring events, including the taxation of foreign income. The Company’s effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other nonrecurring events that may not be predictable. On December 22, 2017, the U.S. government enacted comprehensive tax legislation through the TCJA. The TCJA significantly revises the U.S. corporate income tax including, lowering the statutory U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018, implementing a modified territorial tax system and imposing a mandatory one-time transition tax on accumulated earnings and profits (“E&P”) of foreign subsidiaries that were previously deferred from U.S. income taxes. While the company has not finalized the accounting for the tax effects of the enactment of the TCJA, FactSet has made a reasonable estimate of the effects on the existing U.S. deferred tax balances and the one-time transition tax. The Company will continue to refine its calculations as additional analyses are completed. In addition, the estimates may also be affected by changes in interpretations at the federal and state levels, and any additional regulatory guidance that may be issued.
FactSet had approximately $250.0 million in undistributed foreign E&P generated prior to December 31, 2017, which resulted in a one-time transition tax expense of $23.2 million recorded during the second quarter of fiscal 2018, payable over an eight-year period. This amount may change as the Company finalizes the calculation of foreign E&P previously deferred from U.S. federal taxation, as well as the analysis of available foreign tax credits. Due to the changes in taxation of undistributed foreign earnings under the TCJA, FactSet will continue to analyze foreign subsidiary earnings, as well as global working capital requirements, and may repatriate earnings when the amounts are remitted substantially free of additional tax.

Due to FactSet’s August 31^st fiscal year-end, the lower tax rate was phased in, resulting in a blended U.S. statutory federal rate of 25.7% for the full fiscal 2018 year and a 21% rate for subsequent years. The reduction in the statutory federal rate also required the remeasurement of the Company’s net U.S. deferred tax position, which resulted in a non-recurring tax charge of $2.3 million. The provisional expense related to the one-time transition tax on the undistributed foreign earnings and the non-recurring tax charge from the remeasurement of deferred taxes were partially offset by the lower blended U.S. statutory rate and the recognition of excess tax benefits from the adoption of the employee share-based payment accounting standard.
Deferred Tax Assets and Liabilities

The significant components of deferred tax assets that ~~are~~ recorded inwithin the Consolidated Balance ~~Sheets~~Sheet were as ~~follows (in thousands):~~follows:

At August 31,

2015

2014

Current

At August 31,

(in thousands)

2018

2017

Deferred tax assets:

Receivable reserve
$ 541 $ 597 $ 599 $ 811
Deferred rent
794 1,067
Other
770 177
Net current deferred tax assets
$ 2,105 $ 1,841
Non-current

Depreciation on property, equipment and leasehold improvements
$ 10,880 $ 9,831 1,032 2,220
Deferred rent
5,108 3,572 7,711 11,615
Stock-based compensation
17,562 18,160 14,827 20,117
Purchased intangible assets, including acquired technology
(17,533
)
(10,750
)
(24,059
)
(32,742 )
Other
4,582 1,564 9,606 8,059
Net non-current deferred tax assets
$ 20,599 $ 22,377
Total deferred tax assets
$ 22,704 $ 24,218 $ 9,716 $ 10,080

The significant components of deferred tax liabilities ~~that are~~ recorded inwithin the Consolidated Balance ~~Sheets~~Sheet were as ~~follows (in thousands):~~
At August 31,

2015

2014

Current

Other
$ 562 $ —
Net current deferred tax liabilities
$ 562 $ —
Non-current

Purchased intangible assets, including acquired technology
$ 1,886 $ 3,478
Stock-based compensation
— (860
)
Other
(189
)
303
Net non-current deferred tax liabilities
$ 1,697 $ 2,921
Total deferred taxliabilities
$ 2,259 $ 2,921
A provision has not been made for additional U.S. Federal taxes as all undistributed earnings of foreign subsidiaries are considered to be invested indefinitely or will be repatriated free of additional tax. The amount of such undistributed earnings of these foreign subsidiaries included in consolidated retained earnings was immaterial at August 31, 2015 and 2014. As such, the unrecognized deferred tax liability on those undistributed earnings was immaterial. These earnings could become subject to additional tax if they are remitted as dividends, loaned to FactSet, or upon sale of the subsidiary’s stock.follows:

At August 31,

(in thousands)

2018

2017

Deferred tax liabilities:

Stock-based compensation
$ (946 ) $ (815 )
Purchased intangible assets, including acquired technology
22,429 26,231
Other
(293 ) 1,858
Total deferred tax liabilities
$ 21,190 $ 27,274

Unrecognized Tax Positions

Applicable accounting guidance prescribes a comprehensive model for the financial statement recognition, measurement, classification and disclosure of uncertain tax positions that a company has taken or expects to take on a tax return. A company can recognize the financial effect of an income tax position only if it is more likely than not (greater than 50%) that the tax position will prevail upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit or expense can be recognized in the consolidated financial statements. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

As of August 31, ~~2015,~~2018, the Company had gross unrecognized tax benefits totaling $6.8 million, including $1.3 million of accrued interest, recorded as non-current taxes payable in the consolidated balance sheet. Approximately $1.0 million of these unrecognized tax benefits would have affected the current year effective tax rate if realized as of August 31, 2015. As of August 31, 2014, the Company had gross unrecognized tax benefits totaling $5.5$9.2 million, including $1.1 million of accrued interest, recorded as ~~non-current~~Non-current taxes payable inwithin the consolidated balance sheet. The Company recognizes interest and penalty charges related to unrecognized tax benefits as income tax expense, which is consistent with the recognition in prior reporting periods. The Company recognized interest charges of $0.2 million, $0.1 million and less than $0.1 million during the fiscal years ended August 31, 2015, 2014 and 2013, respectively.
Consolidated Balance Sheet. Unrecognized tax benefits represent tax positions taken on tax returns but not yet recognized in the consolidated financial statements. When applicable, the Company adjusts the previously recorded tax expense to reflect examination results when the position is ultimately settled. The Company regularly engages in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. It is reasonably possible that certain federal, foreign, and state tax matters may be concluded in the next 12 months. However, FactSet has no reason to believe that such audits will result in the payment of additional taxes and/or penalties that would have a material adverse effect on the Company’s results of operations or financial position, beyond current estimates. Any changes in accounting estimates resulting from new developments with respect to uncertain tax positions will be recorded as appropriate. The Company does not currently anticipate that the total amounts of unrecognized tax benefits will significantly change within the next 12 months.

The following table summarizes the changes in the balance of gross unrecognized tax ~~benefits (in thousands):~~benefits:

Unrecognized income tax benefits at August 31, 2012
$ 5,464
(in thousands)

Unrecognized income tax benefits at August 31, 2015
$ 6,776
Additions based on tax positions related to the current year
1,372 1,779
Additions for tax positions of prior years
986 1,436
Statute of limitations lapse
(1,103 ) (1,209 )
Reductions from settlements with taxing authorities
(1,284 )
Unrecognized income tax benefits at August 31, 2013
$ 5,435
Unrecognized income tax benefits at August 31, 2016
$ 8,782
Additions based on tax positions related to the current year
921 3,896
Additions for tax positions of prior years
628 628
Statute of limitations lapse
(717 ) (1,822 )
Reductions from settlements with taxing authorities
(766 )
Unrecognized income tax benefits at August 31, 2014
$ 5,501
Unrecognized income tax benefits at August 31, 2017
$ 11,484
Additions based on tax positions related to the current year
962 2,954
Additions for tax positions of prior years
1,122 531
Statute of limitations lapse
(809 ) (3,146 )
Unrecognized income tax benefits at August 31, 2015
$ 6,776
Reductions from settlements with Taxing Authorities
(2,600 )
Unrecognized income tax benefits at August 31, 2018
$ 9,223

In the normal course of business, the Company’s tax filings are subject to audit by federal, state and foreign tax authorities. At August 31, ~~2015,~~2018, the Company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:

~~Major Tax Jurisdictions~~
~~Open Tax Years~~
~~U.S.~~
~~Federal~~
~~2013 through 2015~~
~~State (various)~~
~~2010 through 2015~~
~~Europe~~
~~United Kingdom~~
~~2013 through 2015~~
~~France~~
~~2012 through 2015~~

Major Tax Jurisdictions

Open Tax Years

U.S.

Federal
2015 through 2018
State (various)
2015 through 2018

Europe

United Kingdom
2015 through 2018
France
2016 through 2018
Germany
2017 through 2018

~~17.~~18. DEBT

FactSet’s debt obligations consisted of the ~~following (in thousands):~~following:

At August 31,

2015

2014

2015 Revolving Credit Facility(maturity date of September 21, 2018)
$ 35,000 $ —
Total Outstanding Debt at fiscal year-end
$ 35,000 $ —

At August 31,

(in thousands)

2018

2017

2017 Revolving Credit Facility (maturity date of March 17, 2020)
$ 575,000 $ 575,000

On ~~February 6, 2015,~~March 17, 2017, the Company entered into a Credit Agreement (the ~~“Credit~~“2017 Credit Agreement”) between FactSet, as the borrower, and PNC Bank, ~~of America, N.A.~~National Association (“PNC”), as the ~~lender (the “Lender”). At that date, the~~administrative agent and lender. The 2017 Credit Agreement ~~provided~~provides for a ~~$35.0~~$575.0 million revolving credit facility (the ~~“Revolving~~“2017 Revolving Credit Facility”)~~, under which the Company could~~. FactSet may request ~~borrowings. The Credit Agreement also allowed FactSet to arrange for additional~~ borrowings ~~for an aggregate amount of up to $265.0 million provided that any such request for additional borrowings was in a minimum amount of $25.0 million.~~
~~For purposes of funding its acquisition of Code Red on February 6, 2015, FactSet borrowed $35.0 million in the form of a Eurodollar rate loan (the “Loan”)~~ under the 2017 Revolving Credit Facility. The proceeds of the Loan made under the Credit Agreement could be used for permitted acquisitions and general corporate purposes. There are no prepayment penalties if the Company elects to prepay the Loan prior toFacility until its scheduled maturity date. The principal balance is payable in full on the maturity date. The $35.0 million borrowed under the Loan bears interest on the outstanding principal amount at a rate equal to the Eurodollar rate plus 0.50% and is reported as long-term debt within the Consolidated Balance Sheet at August 31, 2015. The Eurodollar rate is defined in the Credit Agreement as the rate per annum equal to one-month LIBOR. Interest on the Loan is payable quarterly in arrears and on the maturity date. During fiscal 2015 the Company paid approximately $0.1 million in interest on its outstanding Loan amount.
On September 21, 2015, the Company amended the Credit Agreement to borrow an additional $265.0 million (the “Second Amendment) in order to fund FactSet’s acquisition of Portware, LLC (“Portware”) which was announced on September 22, 2015, and closed on October 16, 2015. The maturity date ~~on all outstanding loan amounts (which total $300.0 million as~~ of ~~October 30, 2015) is September 21, 2018.~~March 17, 2020. The ~~Second Amendment~~2017 Credit Agreement also allows FactSet, subject to certain requirements, to arrange for additional borrowings with ~~the Lender~~PNC for an aggregate amount of up to ~~$400.0~~$225.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million. ~~For more information~~Borrowings under the loan bear interest on the ~~Portware~~outstanding principal amount at a rate equal to the daily LIBOR rate plus 1.00%. Interest on the loan outstanding is payable quarterly in arrears and on the maturity date. There are no prepayment penalties if the Company elects to prepay the outstanding loan amounts prior to the scheduled maturity date. The principal balance is payable in full on the maturity date.
In conjunction with FactSet’s entrance into the 2017 Credit Agreement, the Company borrowed $575.0 million in the form of a LIBOR rate loan under the 2017 Revolving Credit Facility and retired the outstanding debt under its previous credit agreement between FactSet, as the borrower, and Bank of America, N.A., as the lender. The total principal amount of the debt outstanding at the time of retirement was $365.0 million and there were no prepayment penalties. Proceeds from the 2017 Revolving Credit Facility were also used to fund FactSet’s acquisition ~~seeNote 21,~~~~Subsequent Events.~~of BISAM.
All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheet at August 31, 2018. During fiscal years 2018, 2017 and 2016, FactSet recorded interest expense of $15.9 million, $8.4 million and $3.0 million, respectively, on its outstanding debt amounts. The principal balance is payable in full on the maturity date.

As of August 31, ~~2015,~~2018, no commitment fee was owed by FactSet since it borrowed the ~~then-full~~full amount ofunder the ~~Revolving~~2017 Credit ~~Facility on February 6, 2015. Other fees~~Agreement. In fiscal 2017, FactSet incurred ~~by the Company, such as~~approximately $0.4 million in legal costs to draft and review the 2017 Credit ~~Agreement, totaled less than $0.1 million and~~Agreement. These costs were capitalized as loan origination ~~fees. These loan origination~~ fees and are ~~being~~ amortized into interest expense over the term of the ~~Loan (three years)~~loan using the effective interest ~~method and totaled less than $0.1 million in fiscal 2015.~~method.

The 2017 Credit Agreement ~~contains~~contained covenants restricting certain FactSet activities, which are usual and customary for this type of ~~loan.In~~loan.
In addition, the 2017 Credit Agreement ~~requires~~required that FactSet ~~must~~ maintain a consolidated leverage ratio, as measured by total funded debt/EBITDA below a specified level as of the end of each fiscal quarter. The Company was in compliance with all of the covenants of the 2017 Credit Agreement as of August 31, ~~2015.~~2018.
19. COMMITMENTS AND CONTINGENCIES

18.~~COMMITMENTS AND CONTINGENCIES~~
Commitments represent obligations, such as those for future purchases of goods or services that are not yet recorded on the balance sheet as liabilities. FactSet records liabilities for commitments when incurred (~~i.e.~~(i.e., when the goods or services are received).

Lease Commitments

At August 31, ~~2015, the Company leases~~2018, FactSet was leasing approximately 202,000 square feet of ~~office space at its headquarters in Norwalk, Connecticut. In addition, FactSet leases~~existing office space for its ~~U.S. reportable segment~~headquarters at 601 Merritt 7, Norwalk, Connecticut. On February 14, 2018, the Company entered a new lease to relocate its corporate headquarters to 45 Glover Avenue in New York, New York; Boston, Massachusetts; Chicago, Illinois; San Francisco, California; Austin, Texas; Jackson, Wyoming; Atlanta, Georgia; Tuscaloosa, Alabama; Newark, Ridgewood and Piscataway, New Jersey; Manchester, New Hampshire; Reston, Virginia, Youngstown, Ohio, and Toronto, Canada.Norwalk, Connecticut. The new location will comprise approximately 173,000 square feet of office space. FactSet expects to take possession of the newly leased property on or around January 1, 2019, for fit-out purposes. The Company will continue to occupy its existing headquarters space until the new headquarters property is ready for occupancy, currently estimated to be in the second quarter of fiscal 2020.
Including new lease agreements executed during fiscal 2018, the Company’s ~~European segment operates in~~worldwide leased office space ~~in London, England; Paris and Avon, France; Amsterdam, the Netherlands; Frankfurt, Germany; Dubai, United Arab Emirates; Milan, Italy; and Riga, Latvia. Office~~increased to approximately 1,750,000 square feet of office space ~~in Tokyo, Japan; Hong Kong; Singapore; Mumbai, India; and Sydney, Australia are leased by FactSet for its Asia Pacific~~under various non-cancelable operating ~~segment. The data content collection centers located in Hyderabad, India and Manila, the Philippines benefit all of the Companies operating segments. The~~ leases which expire on various dates through 2031. Total minimum rental payments associated with the leases are recorded as rent expense (a component of ~~selling, general and administrative expenses)~~Selling, General & Administrative expense) on a straight-line basis over the periods of the respective non-cancelable lease terms. Future minimum commitments for the Company’s operating leases in place as of August 31, 2018, including the fully executed lease for its new headquarters in Norwalk, Connecticut are as follows:

(in thousands)
Years ended August 31,

Minimum Lease
Payments

2019
$ 41,094
2020
37,846
2021
35,505
2022
32,819
2023
30,524
Thereafter
229,977
Total
$ 407,765

During fiscal ~~2015, 2014~~2018, 2017 and ~~2013,~~2016, rent expense (including operating costs) for all operating leases amounted to ~~$38.6~~$54.6 million, ~~$37.7~~$48.4 million and ~~$36.2~~$43.2 million, respectively. At August 31, ~~2015~~2018 and ~~2014,~~2017, deferred rent reported within the ~~consolidated balance sheet~~Consolidated Balance Sheets totaled ~~$20.9~~$39.4 million and ~~$18.3~~$37.4 million, of which ~~$18.4~~$33.6 million and ~~$14.9~~$33.5 million, respectively, was reported as a non-current liability within the line itemDeferred Rent and Other Non-Current Liabilities..

Approximately ~~$1.0~~$2.0 million of standby letters of credit have been issued during the ordinary course of business in connection with the Company’s current leased office space as of August 31, ~~2015.~~2018. These standby letters of credit contain covenants that, among other things, require FactSet to maintain minimum levels of consolidated net worth and certain leverage and fixed charge ratios. As of August 31, ~~2015~~2018 and ~~2014,~~2017, FactSet was in compliance with all covenants contained in the standby letters of credit.

~~In fiscal 2015, FactSet entered into the following new lease agreements:~~
●
~~Boston, Massachusetts~~:A new lease amendment was signed to extend and expand the Company’s existing office space in Boston by 4,809 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $6.6 million through June 2022.
●
~~Hyderabad, India~~:
-A new lease amendment was entered into during November 2014 to renew the Company’s existing office space in Hyderabad. At the time of signing, the renewal resulted in incremental future minimum rental payments of $2.2 million over the non-cancelable lease term through November 2019.
-A new lease agreement was entered into during April 2015 for 43,830 square feet of new office space in Hyderabad. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $1.8 million over the lease term through September 2020.
●
~~Manila, Philippines~~:A new lease agreement was entered into during April 2015 for 13,043 square feet of new office space in Manila. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $1.5 million over the non-cancelable lease term through June 2020.
●
~~New York, New York~~:A new lease amendment was signed to extend and expand the Company’s existing office space in New York by 19,979 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $21.2 million through August 2031. The amendment included approximately $1.9 million in tenant allowances.
●
~~Norwalk, Connecticut:~~A new lease amendment was signed to extend and expand the Company’s existing office space in Norwalk by 9,587 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $0.9 million through December 2019.
●
~~London, England:~~A new lease agreement was entered into in July 2015 for 15,051 square feet of new office space in London. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $21.1 million over the non-cancelable lease term through March 2031.
At August 31, 2015, the Company’s lease commitments for office space provide for the following future minimum rental payments under non-cancelable operating leases with remaining terms in excess of one year (in thousands):
Years Ended August 31,

Minimum Lease
Payments

2016
$ 22,695
2017
28,002
2018
27,373
2019
25,974
2020
20,129
Thereafter
145,929
Total
$ 270,102
Purchase Commitments with Suppliers

Purchase obligations represent payments due in future periods in respect of commitments to the Company’s various data vendors as well as commitments to purchase goods and services such as telecommunication and computer maintenance services. These purchase commitments are agreements that are enforceable and legally binding on FactSet, and ~~that~~they specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. As of August 31, ~~2015~~2018 and ~~2014,~~2017, the Company had total purchase commitments with suppliers of ~~$65.2~~$79.0 million and ~~$53.3~~$81.0 million, respectively. There were no material changes in the Company’s purchase commitments with suppliers during fiscal 2018.

Contingencies
~~Legal Matters~~
FactSet accrues non income-tax liabilities for contingencies when management believes that a loss is probable and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. The Company issubject to legal proceedings, claims, and litigation arising in the ordinary course of business, including intellectual property litigation.Based on information available,FactSet’s management does not believe that the ultimate outcome of these unresolved matters against the Company, individually or in the aggregate, is likely to have a material adverse effect on the Company'sconsolidated financial position, its results of operations or its cash flows.

Income Taxes
Uncertain income tax positions are accounted for in accordance with applicable accounting guidance (see Note ~~16)~~17). FactSet is currently under audit by ~~multiple~~ tax ~~authorities. The Company~~authorities and has reserved for potential adjustments to its provision for income taxes that may result from examinations by, or any negotiated ~~agreements~~settlements with, these tax ~~authorities, and the~~authorities. The Company believes that the final outcome of these examinations or ~~agreements~~settlements will not have a material effect on its results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period FactSet determines the liabilities are no longer necessary. If the Company’s estimates of the federal, state, and foreign income tax liabilities are less than the ultimate assessment, a further charge to expense would result.

Legal Matters
FactSet accrues non income-tax liabilities for contingencies when management believes that a loss is probable, and the amounts can be reasonably estimated, while contingent gains are recognized only when realized. The Company is engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business, including employment matters, commercial and intellectual property litigation. The outcome of all the matters against the Company is subject to future resolution, including the uncertainties of litigation. Based on information available at August 31, 2018, FactSet’s management believes that the ultimate outcome of these unresolved matters against the Company, individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position, its results of operations or its cash flows.
Sales Tax Matters
In the third quarter of fiscal 2018, FactSet received a letter from the Massachusetts Department of Revenue relating to prior tax periods. The letter requested additional sales information in order to determine if a notice of intent to assess should be issued to FactSet. Based upon a preliminary review of their request, the Company believes the state may assess sales tax, and underpayment penalties and interest, on previously recorded sales transactions. Due to the uncertainty surrounding the assessment process, the Company is unable to reasonably estimate the ultimate outcome of this matter and, as such, has not recorded a liability as of August 31, 2018. While FactSet believes that it will ultimately prevail if the Company is presented with a formal assessment and is required to pay it, the amount could have a material impact on the Company’s consolidated financial position, cash flows and results of operations.
Indemnifications
As permitted or required under Delaware law and to the maximum extent allowable under that law, FactSet has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was serving, at FactSet’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments FactSet could be required to make under these indemnification obligations is unlimited; however, FactSet has a director and officer insurance policy that it believes mitigates FactSet's exposure and may enable FactSet to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification obligations is immaterial.

~~19.~~~~RISK~~S20. RISKS AND CONCENTRATIONS OF CREDIT RISK

Financial Risk Management

Foreign Currency Exchange Risk
The Company ~~is exposed to changes~~conducts business outside the U.S. in ~~foreign currency exchange rates, which could affect its operating results, financial position and cash flows. The Company’s primary foreign currency market exposures include~~several currencies including the British Pound Sterling, Euro, Indian Rupee, Japanese Yen ~~Indian Rupee~~ and Philippine Peso. The financial statements of these foreign subsidiaries are translated into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates for the period for revenues and expenses. To manage the ~~extent that FactSet’s international activities recorded in local currencies increase in~~exposures related to the ~~future, its exposure~~effects of foreign exchange rate fluctuations, the Company utilizes derivative instruments (foreign currency forward contracts). By their nature, all derivative instruments involve to ~~fluctuations in~~varying degrees, elements of market and credit risk. The market risk associated with these instruments resulting from currency exchange ~~rates will correspondingly increase. FactSet manages its exposure~~movements is expected to ~~foreign currency exchange~~offset the market risk through its regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge currency exposures as well as to reduce earnings volatility resulting from shifts in market rates. FactSet only enters into foreign currency forward contracts to manage foreign currency exposures. The fair market values of all the Company’s derivative contracts change with fluctuations in currency rates and are designed so that any changes in their values are offset by changes in the values of the underlying ~~exposures. See Note 5,~~~~Derivative Instruments~~~~, for additional analysis~~transactions, assets and liabilities being hedged. FactSet does not believe there is significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with a major financial institution. Further, the Company’s policy is to deal with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties. FactSet’s primary objective in holding derivatives is to reduce the volatility of earnings associated with changes in foreign ~~currency exchange rate risk.~~currency.

Interest Rate Risk

~~Interest Rate Risk~~Cash and Cash Equivalents
- The fair market value of ~~the Company’s~~FactSet’s cash and investments at August 31, ~~2015~~2018 was ~~$182.4~~$237.9 million. ~~FactSet’s~~The Company’s cash and cash equivalents consist of demand deposits and money market funds with original maturities of three months or ~~fewer~~less and are reported at fair value. The Company’s investments consist of both mutual funds and certificates of ~~deposits with~~deposit as both are part of the Company’s investment strategy. These mutual funds and certificates of deposit are included as Investments (short term) on the Company’s Consolidated Balance Sheet as the certificates of deposit have original maturities greater than three months, but less than one year and ~~as such,~~the mutual funds can be liquidated at the Company’s discretion. The mutual funds and certificates of deposit are ~~reported as short-term investments.~~held for investment and are not considered debt securities. It is anticipated that the fair market value of the Company’s ~~portfolio~~cash and investments will continue to be immaterially affected by fluctuations in interest rates. Preservation of principal is the primary goal of FactSet’s cash and investment policy. Pursuant to established investment guidelines, the Company tries to achieve high levels of credit quality, liquidity and diversification. Its investment guidelines do not permit FactSet to invest in puts, calls, strips, short sales, straddles, options, commodities, precious metals, futures or investments on margin. Because ~~FactSet~~the Company has a restrictive investment policy, its financial exposure to fluctuations in interest rates is expected to remain low. The Company does not believe that the value or liquidity of its cash and investments have been significantly impacted by ~~the recent credit crisis.~~current market events.

Debt - As of August 31, ~~2015,~~2018, the fair value of ~~the Company’s~~FactSet’s long-term debt was ~~$35.0~~$575.0 million, which approximated its carrying amount ~~given its floating interest rate basis~~ and was determined based on quoted market prices for debt with a similar maturity. ~~The debt bears interest on the outstanding principal amount at a rate equal to 0.50% plus the Eurodollar rate, which is defined in the agreement as the rate per annum equal to one-month LIBOR.It~~It is anticipated that the fair market value of ~~the Company’s~~FactSet’s debt will continue to be immaterially affected by fluctuations in interest rates and ~~FactSet~~the Company does not believe that the value of its debt has been significantly impacted by current market events. The debt bears interest on the outstanding principal amount at a rate equal to the daily LIBOR rate plus a spread using a debt leverage pricing grid currently at 1.00%. During fiscal 2018 and fiscal 2017, the Company recorded interest expense of $15.9 million and $8.4 million in interest on its outstanding debt amounts, respectively. Assuming all terms of the Company’s outstanding long-term debt remained the same, a hypothetical 25 basis point change (up or down) in the one-month LIBOR rate would result in a $1.4 million change in its annual interest expense.

Current market events have not required the Company to modify materially or change its financial risk management strategies with respect to its exposures to foreign currency exchange risk and interest rate risk.

Concentrations of Credit Risk

Cash equivalents
Cash and cash equivalents are maintained primarily ~~maintained~~ with ~~two~~five financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties.

Accounts Receivable
Accounts receivable are unsecured and are derived from revenues earned from clients located around the globe. FactSet ~~performs ongoing credit evaluations of its clients and~~ does not require collateral from its ~~clients.~~clients but performs credit evaluations on an ongoing basis. The Company maintains reserves for potential write-offs and ~~these~~evaluates the adequacy of the reserves periodically. These losses have historically been within expectations. No single client represented 10% or more of FactSet's total revenues in any fiscal year presented.At August 31, ~~2015,~~2018, the Company’s largest individual client accounted for approximately 2% of total annual subscriptions, and ~~annual~~ subscriptions from the ten largest clients did not surpass 15% of total annual subscriptions, consistent with August 31, ~~2014. At~~2017. As of August 31, ~~2015~~2018 and ~~2014,~~2017, the receivable reserve was ~~$1.6~~$3.5 million and ~~$1.7~~$2.7 million, ~~respectively~~.respectively.

Derivative Instruments
As a result of the use of derivative instruments, the Company is exposed to counterparty credit risk. FactSet has incorporated counterparty risk into the fair value of its derivative assets and its own credit risk into the value of the Company’s derivative ~~liabilities.~~liabilities, when applicable. FactSet calculates credit risk from observable data related to ~~CDS~~credit default swaps (“CDS”) as quoted by publicly available information. Counterparty risk is represented by CDS spreads related to the senior secured debt of the respective bank with whom FactSet has executed these derivative transactions. ~~Because~~As CDS spread information is not available for FactSet, the Company’s credit risk is determined based on using a simple average of CDS spreads for peer ~~companies as determined by FactSet.~~companies. To mitigate counterparty credit risk, FactSet enters into contracts with large financial institutions and regularly ~~review~~reviews its credit exposure balances as well as the creditworthiness of the counterparties. The Company does not expect any losses as a result of default of its counterparties.

Concentrations of Other Risk
Data Content Providers
Certain data sets that FactSet relies on have a limited number of suppliers, although the Company makes every effort to assure that, where reasonable, alternative sources are available. However, FactSet is not dependent on any one ~~third party~~third-party data supplier in order to meet the needs of its clients. FactSet combines the data from these commercial databases into its own dedicated single online service, which the client accesses to perform their analysis. No single vendor or data supplier represented more than 10% ~~or more~~ of FactSet's total data expenses in any fiscal year presented.

~~20.~~21. UNAUDITED QUARTERLY FINANCIAL DATA

The following table presents selected unaudited financial information for each of the quarterly periods in the years ended August 31, ~~2015~~2018 and ~~2014.~~2017. The results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period-to-period comparisons should not be relied upon as an indication of future ~~performance (in thousands, except per share data).~~performance.

Fiscal 2015

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal 2018 (in thousands, except per share data)

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Revenues
$ 242,676 $ 247,792 $ 254,522 $ 261,779 $ 329,141 $ 335,231 $ 339,911 $ 345,861
Cost of services
97,543 99,516 100,686 107,595 $ 161,524 $ 163,232 $ 165,073 $ 169,467
Selling, general and administrative
64,873 67,628 68,480 68,531 $ 78,519 $ 76,514 $ 81,573 $ 88,038
Operating income
80,260 80,648 85,356 85,653 $ 89,098 $ 95,485 $ 93,265 $ 88,356
Net income
55,860 61,598 61,409 62,184 $ 70,379 $ 53,137 $ 74,746 $ 68,823
Diluted earnings per common share⁽¹⁾
$ 1.32 $ 1.46 $ 1.45 $ 1.48
Weighted average common shares (diluted)
42,340 42,306 42,297 41,995
Diluted EPS⁽¹⁾
$ 1.77 $ 1.33 $ 1.91 $ 1.77
Diluted weighted average common shares
39,680 39,846 39,104 38,879
Fiscal 2017 (in thousands, except per share data)

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Revenues
$ 288,063 $ 294,354 $ 312,120 $ 326,642
Cost of services
$ 127,250 $ 131,635 $ 146,426 $ 161,269
Selling, general and administrative
$ 70,494 $ 70,973 $ 78,052 $ 82,945
Operating income
$ 90,319 $ 91,746 $ 87,642 $ 82,428
Net income
$ 66,583 $ 66,710 $ 65,414 $ 59,552
Diluted EPS⁽¹⁾
$ 1.66 $ 1.68 $ 1.66 $ 1.52
Diluted weighted average common shares
40,100 39,700 39,457 39,281

⁽¹⁾
Diluted earnings per common share is calculated independently for each of the periods presented. Accordingly, the sum of the quarterly ~~earnings per share~~EPS amounts may not equal the total for thefiscalyear.

Fiscal 2014

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Revenues
$ 222,975 $ 226,934 $ 231,761 $ 238,664
Cost of services
83,250 87,254 90,661 92,521
Selling, general and administrative
64,985 64,626 68,063 66,757
Operating income
74,740 75,054 73,037 79,386
Net income
52,178 52,426 51,532 55,407
Diluted earnings per common share⁽¹⁾
$ 1.19 $ 1.22 $ 1.21 $ 1.31
Weighted average common shares (diluted)
43,773 43,107 42,615 42,386
⁽¹⁾
~~Diluted earnings per common share is calculated independently for each of the periods presented. Accordingly, the sum of the quarterly earnings per share amounts may not equal the total for the~~~~fiscal~~~~year.~~
~~21. SUBSEQUENT EVENTS~~
As previously announced, on September 21, 2015, FactSet agreed to acquire (the “Acquisition”) all of the issued and outstanding membership interests of Portware pursuant to a Securities Purchase Agreement by and among FactSet, Long Ridge Equity Partners I, LP, Long Ridge Offshore Subsidiary Holdings, LLC, Portware Investors Parallel Holdings LLC, Portware, Long Ridge Portware Holdings, Inc. and the Individual Sellers (as defined therein). On October 16, 2015, the Company completed the Acquisition for $265.0 million in cash, less certain adjustments set forth in the Securities Purchase Agreement, including, among others, a customary working capital adjustment. FactSet funded the Acquisition by borrowing $265.0 million on October 16, 2015 under its existing revolving credit facility, which it had amended on September 21, 2015.
With the acquisition of Portware, FactSet will offer a platform that will increase value to global asset managers by expanding its capabilities to include multi-asset trade automation. Revenue from Portware will be recognized based on geographic business activities in accordance with how the Company’s operating segments are currently aligned. The Company expects the majority of the purchase price to be allocated to goodwill and acquired intangible assets. The pro forma financials that may be required in connection with the Acquisition have not been included as the valuation of certain assets and liabilities is ongoing as of the date of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of ~~the Company’s~~our management, including the principal executive officer and principal financial officer, ~~the Company has~~we have evaluated the effectiveness of ~~its~~our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the annual period covered by this report. Based on that evaluation, the principal executive officer and principal financial officer have concluded that ~~the Company’s~~our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) are effective to ensure that information required to be disclosed by ~~the Company~~us in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to ~~the Company’s~~our management, including ~~its~~our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in ~~the Company’s~~our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal ~~2015~~2018 that have materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

See Management’s Report on Internal Control over Financial Reporting under Item 8 of this Report on ~~page 45.~~Form 10-K, which is incorporated herein by reference.

Report of Independent Registered Public Accounting Firm

See Report of Independent Registered Public Accounting Firm under Item 8 of this Report on ~~page 47.~~Form 10-K, which is incorporated herein by reference.

ITEM 9B. OTHER INFORMATION

~~None.~~In the Current Report on Form 8-K filed on September 6, 2018, the Company reported in connection with her hiring that Helen L. Shan, its Executive Vice President and Chief Financial Officer, would be granted an annual equity award with a grant date value of $400,000 in conjunction with the Company’s fiscal 2019 equity grant and that such grant was estimated to be made in early November 2018. In fact, this grant is expected to be made in November 2019 in connection with the Company’s 2019 equity grants at the same time as all other annual option grants are made to executives in calendar year 2019.

PART III

ITEM 10. DIRECTORS,EXECUTIVE OFFICERSAND CORPORATE GOVERNANCE

The information required by this item relating to our directors and nominees, ~~regarding~~relating to compliance with Section 16(a) of the Securities Act of 1934, and ~~regarding~~relating to our Audit Committee is included under the captions “Corporate Governance” and ~~“Security~~“Section 16(a) Beneficial Ownership ~~of Certain Beneficial Owners and Management” and contained~~Reporting Compliance” in the definitive Proxy Statement dated October 30, ~~2015,~~2018, and all ~~of which~~such information is incorporated herein by reference.

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating to our executive officers is included under the caption “Executive ~~Officers”~~Officers of the ~~Company’s definitive Proxy Statement dated October 30, 2015, all~~Registrant” in Part I of ~~which information is incorporated herein by reference.~~this Report on Form 10-K.

~~We have~~The Company has adopted a ~~code~~Code of ~~ethics~~Business Conduct and Ethics that applies to ~~our~~all employees, including the Company’s principal executive officer, ~~and all members of our finance department, including the~~ principal financial officer and principal accounting officer. This code of ethics, which consists of the “Code of Ethical Conduct for Financial Managers,” is posted on our website, along with the charters of committees of our Board of Directors. The Internet address for our Website is~~www.factset.com~~,officer, all other officers and the Company’s directors. A copy of this code of ethics may be found in the “Investor Relations” section under “Corporate Governance.” All employees, officers and directors are also subject to our “Code of Business Conduct and Ethics,” also postedis available on the ~~“Corporate Governance” page of our~~Company’s website at https://investor.factset.com on the Leadership and the same information is available in print free of charge to any stockholder who submits a written request to the Company’s Investor Relations department at its corporate headquarters at 601 Merritt 7, Norwalk, Connecticut 06851.
~~We intend~~Corporate Governance page. The Company intends to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website at the address and general location specified above.

The Corporate Governance Guidelines and the charters of the committees of our Board of Directors, including the Audit Committee, Compensation and Talent Committee and Nominating and Corporate Governance Committee are also available on our website at https://investor.factset.com on the Leadership and Corporate Governance page. The guidelines, charters and code of ethics are also available in print free of charge to any stockholder who submits a written request to our Investor Relations department at our corporate headquarters at 601 Merritt 7, Norwalk, Connecticut 06851.
ITEM 11. EXECUTIVE COMPENSATION

The information required by this item relating to ~~our executive~~ compensation is included under the ~~caption~~captions “Executive ~~Compensation” contained in~~Compensation,” “Compensation Discussion and Analysis,” “Compensation and Talent Committee Report,” “Director Compensation Program,” including “Equity Compensation,” and “Director Compensation Table” of the definitive Proxy Statement dated October 30, ~~2015,~~2018, and all ~~of which~~such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS

The information required by this item relating to security ownership of certain beneficial owners and management is included under the caption “Security Ownership of Certain Beneficial Owners and Management” ~~and the information required by this item relating to securities authorized for issuance under equity compensation plans is included under the caption “Equity Compensation Plan Information,”~~, in the definitive Proxy Statement dated October 30, ~~2015, all of which~~2018, and such information is incorporated herein by reference.

Equity Compensation Plan Information
The following table summarizes as of August 31, 2018, the number of outstanding equity awards granted to employees and non-employee directors, as well as the number of equity awards remaining available for future issuance, under FactSet’s equity compensation plans:
(In thousands, except per share data)

(a)

(c)

Number of securities

(b)

Number of securities remaining

to be issued upon exercise

Weighted-average

available for future issuances under

of outstanding options and

exercise price of

equity compensation plans (excluding

Plan category

restricted stock vesting

outstanding options

securities reflected in column (a))

Equity compensation plans approved by security holders
3,286 ⁽¹⁾ $ 153.05 ⁽²⁾ 6,850 ⁽³⁾

Equity compensation plans not approved by security holders
— — —

Total
3,286 ⁽¹⁾ $ 153.05 ⁽²⁾ 6,850 ⁽³⁾
⁽¹⁾
Includes shares of FactSet common stock subject to outstanding restricted stock that will entitle each holder to the issuance of one share of common stock as they vest.

⁽²⁾
Calculated without taking into account shares of FactSet common stock subject to outstanding restricted stock that will become issuable as they vest, without any cash consideration or other payment required for such shares.
⁽³⁾
Includes 282,398 shares available for future issuance under the FactSet Research Systems Inc. Non-Employee Directors’ Stock Option and Award Plan, as Amended and Restated and 268,942 shares available for purchase under the FactSet Research Systems Inc. 2008 Employee Stock Purchase Plan, as Amended and Restated.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,,AND DIRECTOR INDEPENDENCE

The information required by this item relating to review, approval or ratification of transactions with related persons is included under the caption “Certain Relationships and Related Transactions” and all the information required by this item relating to director independence is included under the caption “Corporate Governance” contained in the definitive Proxy Statement dated October 30, ~~2015,~~2018, all of which information is incorporated herein by reference.

ITEM 14. PRINCIPAL ~~ACCOUNT~~~~ING~~ACCOUNTING FEES AND SERVICES

The information required by this item is included under the caption “Proposal 2: Ratification of Independent Registered Public Accounting Firm” in the definitive Proxy Statement dated October 30, ~~2015,~~2018, all of which information is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS,,FINANCIAL STATEMENT SCHEDULES

(a)
Documents filed as part of this Report on Form 10-K:
1.
~~Consolidated~~ Financial Statements

~~The Index to Consolidated Financial Statements under Item 8 on page 44 is incorporated herein by reference as the list of financial statements required as part of this report.~~
The information required by this item is included in Item 8, Financial Statements and Supplementary Data, which is incorporated herein.

2.
Financial ~~Statement~~Statements Schedule

Schedule II – Valuation and Qualifying Accounts

Years ~~Ended~~ended August 31, ~~2015, 2014,~~2018, 2017 and ~~2013~~2016 (in thousands):

Receivable reserveand billing adjustments⁽¹⁾

Balance at Beginning of Year

Charged to Expense/
Against Revenue

Write-offs,
Net of Recoveries

Balance at
End of Year

2015
$ 1,662 $ 2.268 $ 2,350 $ 1,580
2014
$ 1,644 $ 2,135 $ 2,117 $ 1,662
2013
$ 1,830 $ 1,580 $ 1,766 $ 1,644
Receivable reserve
and billing adjustments

Balance at Beginning of Year

Charged to Expense/
Against Revenue⁽¹⁾

Write-offs,
Net of Recoveries

Balance at
End of Year

2018
$ 2,738 $ 4,737 $ 3,985 $ 3,490
2017
$ 1,521 $ 3,381 $ 2,164 $ 2,738
2016
$ 1,580 $ 1,917 $ 1,976 $ 1,521

��
⁽¹⁾
⁽¹⁾Additions to the receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenues.

Additional financial statement schedules ~~have been~~are omitted since they are either not required, not applicable, or the information is otherwise included.

3.
Exhibits

~~EXHIBIT~~
~~NUMBER~~
~~DESCRIPTION~~
~~3.1~~
~~Restated Certificate of Incorporation~~ ⁽¹⁾
~~3.2~~
~~Amendment to the Restated Certificate of Incorporation~~⁽²⁾
~~3.3~~
~~Second Amendment to the Restated Certificate of Incorporation~~⁽³⁾
~~3.4~~
~~Amended and Restated By-laws of FactSet Research Systems Inc.~~⁽⁴⁾
4
~~Form of Common Stock~~⁽¹⁾
~~10.1~~
~~Severance Agreement dated September 20, 1999 between FactSet Research Systems Inc. and Peter G. Walsh~~
~~10.2~~
The ~~FactSet Research Systems Inc. 1996 Stock Option Plan~~⁽⁵⁾information required by this Item is set forth below.
~~10.3~~
~~The FactSet Research Systems Inc. 2000 Stock Option Plan~~⁽⁶⁾
~~10.4~~
~~The FactSet Research Systems Inc. 2004 Stock Option and Award Plan, as Amended and Restated~~ ⁽⁷⁾
~~10.5~~
~~The FactSet Research Systems Inc. 1998 Non-Employee Directors’ Stock Option Plan~~⁽⁸⁾
~~10.6~~
~~The FactSet Research Systems Inc. 2008 Non-Employee Directors’ Stock Option Plan~~⁽⁹⁾
~~10.7~~
~~The FactSet Research Systems Inc. 2008 Employee Stock Purchase Plan, as Amended and Restated~~ ⁽⁹⁾
21
~~Subsidiaries of FactSet Research Systems Inc.~~
~~23.1~~
~~Consent of Ernst & Young LLP~~
~~23.2~~
~~Consent of PricewaterhouseCoopers LLP~~
~~31.1~~
~~Section 302 Certification of Principal Executive Officer~~
~~31.2~~
~~Section 302 Certification of Principal Financial Officer~~
~~32.1~~
~~Section 906 Certification of Principal Executive Officer~~
~~32.2~~
~~Section 906 Certification of Principal Financial Officer~~
101.INS*
~~XBRL Instance Document~~
101.SCH*
~~XBRL Taxonomy Extension Schema~~
101.CAL*
~~XBRL Taxonomy Extension Calculation Linkbase~~
101.DEF*
~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB*
~~XBRL Taxonomy Extension Label Linkbase~~
101.PRE*
~~XBRL Taxonomy Extension Presentation Linkbase~~

Incorporated by Reference

Exhibit
Number

Exhibit
Description
Form
File No.
Exhibit No.
Filing Date
Filed
Herewith
3.1

Restated Certificate of Incorporation
S-1/A
333-04238
3.1
6/26/1996

3.2

Certificate of Amendment of Certificate of Incorporation
10-K
333-22319
3.12
11/20/2001

3.3

Second Amendment to the Restated Certificate of Incorporation
8-K
001-11869
3.1
12/16/2011

3.4

Amended and Restated By-laws of FactSet Research Systems Inc. as amended September 1, 2018
8-K
001-11869
3.1
9/06/2018

4.0

Form of Common Stock
S-1/A
333-04238
4.1
6/26/1996

10.1

FactSet Research Systems Inc. 2004 Employee Stock Option and Award Plan⁽¹⁾
DEF-14A
001-11869
Exhibit A
11/10/2004

10.2

FactSet Research Systems Inc. 2004 Stock Option and Award Plan, as Amended and Restated⁽¹⁾
DEFR-14A
001-11869
Appendix A
12/06/2010

10.3

FactSet Research Systems Inc. Stock Option and Award Plan as Amended and Restated⁽¹⁾
8-K
001-11869
10.1
12/21/2017

10.4

FactSet Research Systems Inc. 2008 Non-Employee Directors’ Stock Option Plan⁽¹⁾
DEF-14A
001-11869
Appendix A
10/30/2008

10.5

FactSet Research Systems Inc. Non-Employee Directors’ Stock Option and Award Plan, as Amended and Restated⁽¹⁾
8-K
  001-11869
10.2
12/21/2017

10.6

Separation Agreement and General Release of Claims with Mark Hale as of November 13, 2017⁽¹⁾
10-Q
  001-11869
10.1
1/09/2018

10.7

Separation Agreement and General Release of Claims with Maurizio Nicolelli as of May 8, 2018⁽¹⁾
10-Q
  001-11869
10.1
7/10/2018

10.8

Separation Agreement and General Release of Claims with Edward Baker-Greene as of July 5, 2018⁽¹⁾
10-Q
  001-11869
10.2
7/10/2018

10.9

Lease, dated February 14, 2018, between FactSet Research Systems Inc. and 45 Glover Partners, LLC⁽²⁾
10-Q
001-11869
10.1
4/09/2018

10.10

Credit Agreement with PNC Bank as of March 17, 2017
8-K
001-11869
10.1
3/20/2017

21

Subsidiaries of FactSet Research Systems Inc.

X
23

Consent of Ernst & Young LLP

X
31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

X
31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

X
32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

X
32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X
101.INS

XBRL Instance Document

X
101.SCH

XBRL Taxonomy Extension Schema

X
101.CAL

XBRL Taxonomy Extension Calculation Linkbase

X
101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X
101.LAB

XBRL Taxonomy Extension Label Linkbase

X
101.PRE

XBRL Taxonomy Extension Presentation Linkbase

X
⁽¹⁾
Indicates a management contract or compensatory plan or arrangement
⁽¹⁾⁽²⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-04238).~~
⁽²⁾
~~Incorporated by reference to the Company’s annual report on Form 10-K~~Confidential treatment has been granted for ~~fiscal year 2001.~~
⁽³⁾
~~Incorporated by reference to the Company’s periodic report on Form 8-K, filed on December 16, 2011.~~portions of this exhibit.

⁽⁴⁾
~~Incorporated by reference to the Company’s periodic report on Form 8-K, filed on December 17, 2013.~~
⁽⁵⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-22319).~~
⁽⁶⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-56870).~~
⁽⁷⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-171667).~~
⁽⁸⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-59839).~~
⁽⁹⁾
~~Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-201498).~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

FACTSET RESEARCH SYSTEMS INC.

(Registrant)

Date: October 30, ~~2015~~2018
/s/ F. PHILIP SNOW

F. Philip Snow

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name

Title
Date

/S/s/ F. PHILIP SNOW

Chief Executive Officer and Director
October 30, ~~2015~~2018

F. Philip Snow (Principal Executive Officer)

/s/ ~~MAURIZIO NICOLELLI~~HELEN L. SHAN

~~Senior~~Executive Vice President and Chief Financial Officer
October 30, ~~2015~~2018

~~Maurizio Nicolelli~~Helen L. Shan (Principal Financial Officer)

/s/ MATTHEW J. MCNULTY

Senior Vice President, Controller
October 30, ~~2015~~2018

Matthew J. McNulty (Principal Accounting Officer)

/~~S/ PHILLIP~~s/ PHILIP A. HADLEY

Chairman
October 30, ~~2015~~2018

Philip A. Hadley

/S/s/ ROBIN A. ABRAMS
Director
October 30, 2018
Robin A. Abrams
/s/ SCOTT A. BILLEADEAU
Director
October 30, 2018
Scott A. Billeadeau
/s/ MALCOLM FRANK
Director
October 30, 2018
Malcolm Frank
/s/ SHEILA B. JORDAN
Director
October 30, 2018
Sheila B. Jordan
/s/ JAMES J. MCGONIGLE

~~Lead Independent~~ Director
October 30, ~~2015~~2018

James J. McGonigle

/~~S/ ROBIN A. ABRAMS~~ s/ LAURIE SIEGEL

Director
October 30, ~~2015~~2018

~~Robin A. Abrams~~Laurie Siegel

/~~S/ SCOTT A. BILLEADEAU~~s/ JOSEPH R. ZIMMEL

Director
October 30, ~~2015~~
~~Scott A. Billeadeau~~
~~/S/ JOSEPH E. LAIRD, JR.~~
~~Director~~
~~October 30, 2015~~
~~Joseph E. Laird, Jr.~~
~~/S/ WALTER F. SIEBECKER~~
~~Director~~
~~October 30, 2015~~
~~Walter F. Siebecker~~
~~/s/ JOSEPH~~ R~~.ZIMMEL~~
~~Director~~
~~October 30, 2015~~2018

Joseph R. Zimmel

95
89

	Large accelerated filer ☒	Accelerated filer ☐
	~~Non-Accelerated~~Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller ~~Reporting Company~~reporting company ☐
	Emerging growth company ☐

~~PART I~~
				Page
ITEM 1.		Business		4

ITEM 1A.		Risk Factors		1413

ITEM 1B.		Unresolved Staff Comments		17

~~ITEM 2.~~		~~Properties~~		17

~~ITEM 3.~~		~~Legal Proceedings~~		18

ITEM 4.2.	Properties		18

ITEM 3.	Legal Proceedings		19

ITEM 4.	Mine Safety Disclosures		1819

PART II

ITEM 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		1920

ITEM 6.		Selected Financial Data		2122

ITEM 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		2224

ITEM 7A.		Quantitative and Qualitative Disclosures About Market Risk		4245

ITEM 8.		Financial Statements and Supplementary Data		4447

ITEM 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		8590

ITEM 9A.		Controls and Procedures		8590

ITEM 9B.		Other Information		8590

PART III

ITEM 10.		Directors, Executive Officers and Corporate Governance		8691

ITEM 11.		Executive Compensation		8691

ITEM 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		8691

ITEM 13.		Certain Relationships and Related Transactions, and Director Independence		8692

ITEM 14.		Principal Accounting Fees and Services		8692

PART IV

ITEM 15.		Exhibits, Financial Statement Schedules		8793

Signatures			8995

		Page(s)
Five-Year Summary of Selected Financial Data		21 22
Management’s Discussion and Analysis of Financial Condition and Results of Operations		~~22-41~~ 24-44
Quantitative and Qualitative Disclosures about Market Risk		42 45
Note 1 to Consolidated Financial Statements entitledOrganization and Nature of Business		54 56
Note 7 to Consolidated Financial Statements entitledSegment Information		63 67

	First		Second		Third		Fourth		First		Second		Third		Fourth
2015
2018
High	$	138.26	$	158.29	$	168.62	$	174.03	$	200.31	$	209.02	$	217.36	$	229.98
Low	$	110.77	$	134.01	$	149.68	$	140.00	$	155.88	$	183.89	$	184.48	$	195.69

2014
2017
High	$	115.39	$	119.08	$	114.82	$	129.28	$	183.17	$	183.64	$	182.56	$	172.22
Low	$	101.07	$	101.41	$	102.31	$	107.02	$	150.95	$	157.56	$	156.92	$	155.09

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares (or approximate dollar value) that may yet be purchased under the plans or programs⁽¹⁾
June 2015		157,811	$	164.02		157,811	$	186,222
July 2015		271,572	$	162.55		271,572	$	142,678
August 2015		50,000	$	168.76		50,000	$	134,240
		479,383	$	163.68		479,383

Name of Officer	Age	Office Held with the Company	Officer Since
F. Philip Snow	51	Chief Executive Officer	2014
Mark J. Hale	42	Executive Vice President, Chief Operating Officer	2015
Scott G. Miller	47	Executive Vice President, Global Director of Sales	2015
Maurizio Nicolelli	47	Senior Vice President, Chief Financial Officer	2009
Edward Baker-Greene	52	Senior Vice President, Chief Human Resources Officer	2015
Rachel R. Stern	50	Senior Vice President, Strategic Resources and General Counsel	2009

Name of Officer	Age	Office Held with the Company	Officer Since
F. Philip Snow	54	Chief Executive Officer	2014
Helen L. Shan	50	Executive Vice President and Chief Financial Officer	2018
Edward Baker-Greene	55	Senior Vice President, Chief Human Resources Officer	2015
Gene D. Fernandez	51	Executive Vice President, Chief Technology and Product Officer	2017
Robert J. Robie	39	Executive Vice President, Head of Analytics and Trading Analytics Solutions	2018
Rachel R. Stern	53	Executive Vice President, General Counsel and Secretary	2009
John W. Wiseman	50	Executive Vice President, Global Head of Sales and Client Solutions	2017

Segment	Leased Location

United States	Atlanta, Georgia
	Austin, Texas
	Boston, Massachusetts
	Chicago, Illinois
	Jackson, Wyoming
	Los Angeles, California
	Manchester, New Hampshire
	Minneapolis, Minnesota
	New York, New York
	Norwalk, Connecticut
	Piscataway, New Jersey
	Reston, Virginia
	San Francisco, California
	Sao Paulo, Brazil
	Toronto, Canada
	Youngstown, Ohio

Europe	Avon, France
	Amsterdam, the Netherlands
	Cologne, Germany
	Dubai, United Arab Emirates
	Frankfurt, Germany
	Gloucester, England
	Johannesburg, South Africa
	London, England
	Luxembourg City, Luxembourg
	Madrid, Spain
	Milan, Italy
	Paris, France
	Riga, Latvia
	Sofia, Bulgaria
	Zurich, Switzerland

Asia Pacific	Chennai, India
	Hong Kong, China
	Hyderabad, India
	Manila, the Philippines
	Melbourne, Australia
	Mumbai, India
	Shanghai, China
	Singapore
	Sydney, Australia
	Tokyo, Japan

	●	~~Boston, Massachusetts~~:A new lease amendment was signed to extend and expand the Company’s existing office space in Boston by 4,809 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $6.6 million through June 2022.

	●	~~Hyderabad, India~~: - A new lease amendment was entered into during November 2014 to renew the Company’s existing office space in Hyderabad. At the time of signing, the renewal resulted in incremental future minimum rental payments of $2.2 million over the non-cancelable lease term through November 2019. - A new lease agreement was entered into during April 2015 for 43,830 square feet of new office space in Hyderabad. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $1.8 million over the lease term through September 2020.

	●	~~Manila, Philippines~~:A new lease agreement was entered into during April 2015 for 13,043 square feet of new office space in Manila. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $1.5 million over the non-cancelable lease term through June 2020.

	●	~~New York, New York~~:A new lease amendment was signed to extend and expand the Company’s existing office space in New York by 19,979 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $21.2 million through August 2031. The amendment included approximately $1.9 million in tenant allowances.

	●	~~Norwalk, Connecticut:~~A new lease amendment was signed to extend and expand the Company’s office space at its headquarters in Norwalk by 9,587 rentable square feet. At the time of signing, the renewal resulted in incremental future minimum rental payments of $0.9 million through December 2019.

	●	~~London, England:~~A new lease agreement was entered into in July 2015 for 15,051 square feet of new office space in London. At the time of signing, the new lease agreement resulted in incremental future minimum rental payments of $21.1 million over the non-cancelable lease term through March 2031.

Years Ended August 31,	Minimum Lease Payments

2016	$	22,695
2017		28,002
2018		27,373
2019		25,974
2020		20,129
Thereafter		145,929

Total	$	270,102

Declaration Date	Dividends Per Share of Common Stock		Type	Record Date	Total Amount (in thousands)		Payment Date
August 10, 2015	$	0.44	Regular (cash)	August 31, 2015	$	18,179	September 15, 2015
May 12, 2015⁽¹⁾	$	0.44	Regular (cash)	May 29, 2015	$	18,274	June 16, 2015
February 11, 2015	$	0.39	Regular (cash)	February 27, 2015	$	16,236	March 17, 2015
November 12, 2014	$	0.39	Regular (cash)	November 28, 2014	$	16,216	December 16, 2014

	For the Years Ended August 31,
	2015		2014		2013		2012		2011		2010		2013		2014		2015		2016		2017		2018
FactSet Research Systems Inc.	$	215	$	173	$	139	$	125	$	120	$	100	$	100	$	124	$	154	$	174	$	154	$	224
S&P 500 Index	$	188	$	191	$	156	$	134	$	116	$	100	$	100	$	123	$	121	$	133	$	151	$	178
NYSE Composite Index	$	152	$	165	$	138	$	120	$	112	$	100	$	100	$	119	$	110	$	116	$	128	$	140
Dow Jones U.S. Financial Services Index	$	187	$	180	$	151	$	112	$	99	$	100	$	100	$	119	$	124	$	125	$	157	$	191

Consolidated Balance Sheet Data
(in thousands)	August 31,
	2015		2014		2013		2012		2011
Cash and cash equivalents	$	158,914	$	116,378	$	196,627	$	189,044	$	181,685
Accounts receivable, net of reserves		95,064		90,354		73,290		74,251		75,004
Goodwill and intangible assets, net		348,339		327,463		280,796		289,162		274,575
Total assets		736,671		663,212		690,197		694,143		657,440
Non-current liabilities		65,307		24,839		30,165		28,703		32,829
Total stockholders’ equity	$	531,584	$	511,082	$	541,779	$	552,264	$	515,188

	For the year ended August 31,
(in thousands, except per share data)	2018			2017			2016			2015			2014
Revenues	$	1,350,145		$	1,221,179		$	1,127,092		$	1,006,768		$	920,335
Operating income	$	366,204	⁽¹⁾	$	352,135	⁽⁴⁾	$	349,676	⁽⁷⁾	$	331,918	⁽¹⁰⁾	$	302,219	⁽¹³⁾
Provision for income taxes	$	84,753		$	86,053		$	122,178		$	92,703		$	91,921
Net income	$	267,085	⁽²⁾	$	258,259	⁽⁵⁾	$	338,815	⁽⁸⁾	$	241,051	⁽¹¹⁾	$	211,543	⁽¹⁴⁾
Diluted earnings per common share	$	6.78	⁽³⁾	$	6.51	⁽⁶⁾	$	8.19	⁽⁹⁾	$	5.71	⁽¹²⁾	$	4.92	⁽¹⁵⁾
Weighted average common shares (diluted)		39,377			39,642			41,365			42,235			42,970
Cash dividends declared per common share	$	2.40		$	2.12		$	1.88		$	1.66		$	1.48

	As of August 31,
(in thousands)	2018		2017		2016		2015		2014
Cash and cash equivalents	$	208,623	$	194,731	$	228,407	$	158,914	$	116,378
Accounts receivable, net of reserves	$	156,639	$	148,331	$	97,797	$	95,064	$	90,354
Goodwill and intangible assets, net	$	850,768	$	881,103	$	546,076	$	348,339	$	327,463
Total assets	$	1,419,447	$	1,413,315	$	1,019,161	$	736,671	$	663,212
Non-current liabilities	$	672,413	$	652,485	$	343,570	$	65,307	$	24,839
Total stockholders’ equity	$	525,900	$	559,691	$	517,381	$	531,584	$	511,082

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Maximum number of shares (or approximate dollar value) that may yet be purchased under the plans or programs ⁽¹⁾
June 2018		49,975	$	199.10		49,975	$	299,325
July 2018		214,503	$	204.09		214,503	$	255,548
August 2018		65,000	$	212.27		65,000	$	241,750
		329,478				329,478

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

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

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

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

⁽⁵⁾	Net income in fiscal 2017 included $4.2 million (after-tax) related to modifications of certain share-based compensation grants, $3.7 million (after-tax) related to restructuring actions and $5.5 million (after-tax) of acquisition-related expenses. Fiscal 2017 net income also included a loss of $0.9 million (after-tax) from a final working capital adjustment related to the sale of FactSet’s Market Metrics business in the fourth quarter of fiscal 2016. These charges were offset by income tax benefits of $1.9 million related primarily to finalizing prior year tax returns and other discrete items.

⁽⁶⁾	Diluted EPS in fiscal 2017 included a $0.11 decrease in diluted EPS from the modifications of certain share-based compensation grants, a $0.09 decrease from the restructuring actions, a $0.13 decrease from acquisition-related expenses and $0.02 decrease from the working capital adjustment, partially offset by a $0.05 increase in diluted EPS from the income tax benefits.

⁽⁷⁾	Operating income in fiscal 2016 included pre-tax charges of $4.6 million related primarily to legal matters, $2.8 million from restructuring actions and $1.8 million related to a change in the vesting of performance-based equity options.

⁽⁸⁾	Net income in fiscal 2016 included $3.3 million (after-tax) related primarily to legal matters, $2.0 million (after-tax) from restructuring actions, $1.2 million (after-tax) related to a change in the vesting of performance-based equity instruments, partially offset by $10.5 million of income tax benefits primarily from the permanent reenactment of the U.S. Federal R&D tax credit (“R&D Tax Credit”), finalizing the fiscal 2015 tax returns and other discrete items and a gain of $81.7 million (after-tax) related to the sale of FactSet’s Market Metrics business in July 2016.

⁽⁹⁾	Diluted EPS in fiscal 2016 included the net effect of a $2.01 increase in diluted EPS from the gain on sale and a $0.25 increase in diluted EPS from the income tax benefits, partially offset by a $0.08 decrease related primarily to legal matters, a $0.05 decrease from the restructuring actions and a $0.03 decrease from a change in the vesting of performance-based equity instruments.

⁽¹⁰⁾	Operating income in fiscal 2015 ~~includes a~~included pre-tax charges of $3.0 million related to the vesting of performance-based equity instruments and $3.2 million related primarily ~~from~~to changes in the senior leadership responsible for the Company’s ~~salesforce.~~sales force.

⁽²⁾⁽¹¹⁾	~~Fiscal~~Net income in fiscal 2015 ~~net income includes~~included $2.1 million (after-tax) of incremental expenses related to the vesting of performance-based equity instruments, $2.2 million (after-tax) related to the changes in the senior leadership responsible for the Company’s ~~salesforce~~sales force and income tax benefits of $8.8 million primarily from the reenactment of the ~~U.S. Federal~~ R&D Tax Credit in December 2014, and finalizing ~~prior year~~the fiscal 2014 tax returns and other discrete items.

⁽³⁾⁽¹²⁾	Diluted EPS ~~for~~in fiscal 2015 ~~includes~~included the net effect of a $0.21 increase in diluted EPS from the ~~reenactment of the U.S. Federal R&D~~income tax ~~credit, finalizing prior year tax returns and other discrete items~~benefits, partially offset by a $0.05 decrease from the vesting of performance-based equity instruments and a $0.05 decrease from the changes in the senior leadership responsible for the Company’s ~~salesforce.~~ sales force.

⁽¹³⁾ ⁽⁴⁾	Operating income ~~for~~in fiscal ~~2013 includes~~2014 included pre-tax charges ~~totaling $18.3~~of $1.6 million related primarily to legal matters and $1.4 million related to a change in the vesting of performance-based ~~stock options granted in connection with the acquisitions of Market Metrics and StreetAccount.~~equity options.

⁽¹⁴⁾ ⁽⁵⁾	~~Fiscal 2013 net~~Net income ~~includes $12.9~~in fiscal 2014 included $1.1 million (after-tax) primarily related to legal matters, $1.0 million (after-tax) of incremental expenses related to the vesting of performance-based ~~stock options granted in connection with the acquisitions of Market Metrics and StreetAccount~~equity instruments and income tax benefits of ~~$7.2~~$0.6 million ~~primarily from~~finalizing the ~~reenactment of the U.S. Federal R&D~~fiscal 2013 tax ~~credit in January 2013~~returns and ~~finalizing prior year tax returns.~~other discrete items.

⁽¹⁵⁾ ⁽⁶⁾	Diluted EPS ~~for~~in fiscal ~~2013 includes~~2014 included the net effect of a ~~$0.29~~$0.03 decrease ~~for the vesting of performance-based options partially offset by a $0.16 increase~~ in diluted EPS from the ~~reenactment of the U.S. Federal R&D tax credit and finalizing prior year tax returns.~~

⁽⁷⁾	Fiscal 2011 operating income includes a pre-tax charge of $7.9 million related to an increase in the estimated number of performance-based stock options that will vest. The revised estimate reflects a higher performance level than previously estimated and accordingly, increased the number of performance-based options that will vest and be expensed.

⁽⁸⁾	~~Net income for fiscal 2011 includes $5.4 million (after-tax) of incremental expenses related to an increase in the estimated number of performance-based stock options that will vest and~~ income tax benefits ~~of $6.3 million primarily~~and $0.02 decrease from ~~finalizing prior year tax returns and the reenactment of the U.S. Federal R&D tax credit in December 2010.~~

⁽⁹⁾	Included in fiscal 2011 diluted EPS were income tax benefits of $0.13 from finalizing prior year tax returns and the reenactment of the U.S. Federal R&D tax credit partially offset by an $0.11 decrease related to an increasea change in the ~~estimated number~~vesting of performance-based ~~stock options that will vest and be expensed.~~equity.

Key Metric	2015		2014		Change
ASV	$	1,057.8	$	963.6		9.8%⁽¹⁾
Revenues	$	1,006.8	$	920.3		9.4%
Diluted EPS	$	5.71	$	4.92		16.1%
Free Cash Flow⁽²⁾	$	280.8	$	247.3		13.5%
Clients		2,976		2,743		8.5%
Users		62,205		54,596		13.9%

	As of and for the Year ended August 31,
(in millions, except per share data, client and user counts)	2018		2017		Change
Revenues	$	1,350.1	$	1,221.2		10.6	%
Operating Income	$	366.2	$	352.1		4.0	%
Net Income	$	267.1	$	258.3		3.4	%
Diluted EPS	$	6.78	$	6.51		4.1	%
ASV⁽¹⁾	$	1,393.1	$	1,316.6		5.8	%	⁽²⁾
Clients⁽³⁾		5,142		4,744		8.4	%
Users⁽⁴⁾		91,897		88,846		3.4	%

(in thousands, except per share data) Years Ended August 31,	2015		2014		Change		2014		2013		Change
													Years ended August 31,
(in thousands, except per share data)													2018		2017		Change			2017		2016		Change
Revenues	$	1,006,768	$	920,335		9.4%	$	920,335	$	858,112		7.3%	$	1,350,145	$	1,221,179		10.6	%	$	1,221,179	$	1,127,092		8.3	%
Cost of services		405,339		353,686		14.6%		353,686		306,379		15.4%	$	659,296	$	566,580		16.4	%	$	566,580	$	487,409		16.2	%
Selling, general and administrative		269,511		264,430		1.9%		264,430		282,314		(6.3)%	$	324,645	$	302,464		7.3	%	$	302,464	$	290,007		4.3	%
Operating income		331,918		302,219		9.8%		302,219		269,419		12.2%	$	366,204	$	352,135		4.0	%	$	352,135	$	349,676		0.7	%
Net income	$	241,051	$	211,543		13.9%	$	211,543	$	198,637		6.5%	$	267,085	$	258,259		3.4	%	$	258,259	$	338,815		(23.8	)%
Diluted earnings per common share	$	5.71	$	4.92		16.1%	$	4.92	$	4.45		10.6%	$	6.78	$	6.51		4.1	%	$	6.51	$	8.19		(20.5	)%
Diluted weighted average common shares		42,235		42,970				42,970		44,624				39,377		39,642					39,642		41,365

($ in millions)
As of August 31,	Total ASV			% Organic Growth			Non-U.S. ASV		% of Total ASV Non-U.S.
2015	$	1,058	⁽¹⁾		9.2	%	$	343		32.4	%
2014	$	964	⁽²⁾		7.3	%	$	312		32.4	%
2013	$	888			5.9	%	$	282		31.8	%
2012	$	843	⁽³⁾		6.8	%	$	271		32.1	%
2011	$	779			13.6	%	$	246		31.6	%
2010	$	684	⁽⁴⁾		7.3	%	$	218		31.9	%
2009	$	623			0.8	%	$	200		32.1	%
2008	$	621			17.6	%	$	195		31.4	%
2007	$	517			21.9	%	$	157		30.4	%
2006	$	423			18.5	%	$	126		29.8	%

⁽¹⁾	In~~cludes $10~~ ~~million~~~~from acquisitions completed in fiscal 2015, including Code Red~~.
⁽²⁾	~~Includes $5 million from the acquisition of Revere and $7 million from the acquisition of Matrix.~~
⁽³⁾	~~Includes $11 million from the acquisition of StreetAccount.~~
⁽⁴⁾	~~Includes $16 million from the acquisition of Market Metrics.~~

(in thousands) Years Ended August 31,	2015			2014			2013
U.S.	$	678,774		$	624,642		$	586,865
% of revenues		67.4	%		67.9	%		68.4	%
Europe	$	251,522		$	227,395		$	208,827
Asia Pacific		76,472			68,298			62,420
International	$	327,994		$	295,693		$	271,247
% of revenues		32.6	%		32.1	%		31.6	%
Consolidated	$	1,006,768		$	920,335		$	858,112

	Twelve Months Ended August 31,
(In thousands)	2018			2017			Change
Revenues	$	1,350,145		$	1,221,179			10.6	%
Deferred revenue fair value adjustment⁽¹⁾		7,691			5,486
Acquisitions and divestitures completed⁽²⁾		(58,624	)		(1,222	)
Currency impact (foreign currency movements)⁽³⁾		(4,952	)		—
Organic revenues	$	1,294,260		$	1,225,443			5.6	%

	Twelve Months Ended August 31,
(In thousands, except per share data)	2018⁽¹⁾			2017⁽²⁾			Change
Operating income	$	366,204		$	352,135			4.0	%
Intangible asset amortization		24,665			19,924
Deferred revenue fair value adjustment		7,691			5,486
Other items		26,950			17,969
Adjusted operating income	$	425,510		$	395,514			7.6	%
Adjusted operating margin		31.3	%		32.2	%

Net income	$	267,085		$	258,259			3.4	%
Intangible asset amortization⁽³⁾		19,723			14,845
Deferred revenue fair value adjustment⁽⁴⁾		6,084			4,093
Other items⁽⁵⁾		21,614			14,308
Income tax items		21,310			(1,918	)
Adjusted net income	$	335,816		$	289,587			16.0	%

Diluted earnings per common share	$	6.78		$	6.51			4.1	%
Intangible asset amortization		0.50			0.37
Deferred revenue fair value adjustment		0.15			0.10
Other items		0.56			0.35
Income tax items		0.53			(0.05	)
Adjusted diluted earnings per common share⁽⁶⁾	$	8.53		$	7.31			16.7	%
Weighted average common shares (Diluted)		39,377			39,642

	Years ended August 31,
(in thousands)	2018			2017			2016
Net cash provided by operating activities	$	385,668		$	320,527		$	331,140
Capital expenditures ⁽¹⁾		(33,520	)		(36,862	)		(47,740	)
Free cash flow ⁽²⁾	$	352,148		$	283,665		$	283,400
Net cash used in investing activities	$	(48,531	)	$	(347,306	)	$	(158,408	)
Net cash used in financing activities	$	(320,037	)	$	(8,161	)	$	(91,002	)
Cash and cash equivalents at end of year	$	208,623		$	194,731		$	228,407

	Payments due by period
	2016			2017-2018		2019-2020	2021 and thereafter		Total
Operating lease obligations⁽¹⁾	$	22.7	$	55.4	$	46.1	$	145.9	$	270.1
Purchase commitments⁽²⁾		60.7		3.8		0.7		—		65.2
Loan outstanding⁽³⁾		—		—		35.0		—		35.0
Total contractual obligations by period⁽⁴⁾	$	83.4	$	59.2	$	81.8	$	145.9	$	370.3

	Payments due by period
(in millions)	2019			2020-2021		2022-2023	2024 and thereafter		Total
Operating lease obligations⁽¹⁾	$	41.1	$	73.4	$	63.3	$	230.0	$	407.8
Purchase commitments⁽²⁾		75.8		3.2		—		—		79.0
Long-term debt obligations⁽³⁾		—		575.0		—		—		575.0
Total contractual obligations by period⁽⁴⁾	$	116.9	$	651.6	$	63.3	$	230.0	$	1,061.8

(in thousands, except vesting percentage data) Vesting Percentage	Cumulative Catch-up Adjustment⁽¹⁾		Remaining Expense to be Recognized
0%(current expectation)	$	—	$	—
80%	$	1,658	$	5,449
90%	$	1,866	$	6,130
100%	$	2,073	$	6,811

Vesting Percentage	Cumulative Catch-up Adjustment*			Remaining Expense to be Recognized
0%	$	(338	)	$	0
10%	$	(253	)	$	516
40%(current expectation)	$	0		$	2,063
70%	$	253		$	3,609
100%	$	506		$	5,156

Consolidated Financial Statements:		Page
~~Consolidated Financial Statements:~~
Management’s Statement of Responsibility for Financial Statements		4548
Management’s Report on Internal Control over Financial Reporting		4548
Reports of Independent Registered Public Accounting ~~Firms~~Firm		~~46-48~~49-50
Consolidated Statements of Income for the years ended August 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016		4951
Consolidated Statements of Comprehensive Income for the years ended August 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016		5052
Consolidated Balance Sheets at August 31, ~~2015~~2018 and ~~2014~~2017		5153
Consolidated Statements of Cash Flows for the years ended August 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016		5254
Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, ~~2015, 2014~~2018, 2017 and ~~2013~~2016		5355
Notes to the Consolidated Financial Statements		5456

Financial Statement Schedule:

Schedule II – Valuation and Qualifying Accounts		8793



/s/F.PPHILIP ~~HILIP~~SNOW S~~NOW~~	/s/MHelen ~~AURIZIO~~L. ShanN~~ICOLELLI~~

F. Philip Snow	~~Maurizio Nicolelli~~Helen L. Shan
Chief Executive Officer	~~Senior~~Executive Vice President and Chief Financial Officer
October 30, ~~2015~~2018	October 30, ~~2015~~2018

Designation of Derivatives	Balance Sheet Location	Aug 31, 2015		Aug 31, 2014
Derivatives designated as hedging instruments	Assets: Foreign Currency Forward Contracts
	Prepaid expenses and other current assets	$	1,035	$	114
	Other assets	$	—		1,292
	Liabilities: Foreign Currency Forward Contracts
	Accounts payable and accrued expenses	$	—	$	591
	Deferred rent and other non-current liabilities	$	1,602	$	—

	Derivatives Offset in Consolidated Balance Sheets
August 31, 2015	Gross Derivative Amounts			Gross Derivative Amounts Offset in Balance Sheet			Net Amounts
Fair value of assets	$	1,040		$	(5	)	$	1,035
Fair value of liabilities		(1,607	)		5			(1,602	)
Total	$	(567	)	$	—		$	(567	)

Year Ended August 31, 2013	U.S.		Europe		Asia Pacific		Total
Revenues from clients	$	586,865	$	208,827	$	62,420	$	858,112
Segment operating profit		138,706		100,187		30,526		269,419
Total assets		444,406		193,202		52,589		690,197
Depreciation and amortization		27,757		4,027		3,995		35,779
Stock-based compensation		37,307		2,264		380		39,951
Capital expenditures		13,649		1,276		3,592		18,517