Contact:

Rachel Stern

FactSet Research Systems Inc.

203.810.1000

Three Months Ended

August 31,

(In thousands, except per share data)

2016

2015

Change

Revenues

%

Adjusted operating income

%

Adjusted net income

%

Adjusted diluted earnings per share

%

GAAP diluted earnings per share

Diluted weighted average shares

●

ASV from U.S. operations was $754.3 million, increasing 8.3% organically over the prior year. U.S. revenues were $190.4 million. Excluding acquired revenue from Portware and revenue related to the Market Metrics business, the U.S. growth rate was 7.4%.

●

ASV from international operations grew 10.7% organically to $395.5 million and now represents 34.4% of total ASV, up from 32.4% a year ago. International revenues rose to $96.9 million. Excluding the impact of foreign currency, acquired revenue from Portware and revenue related to the Market Metrics business, the international revenue growth rate was 11.7%.

●

Adjusted operating margin was 33.4%, compared to 34.6% in the year ago fourth quarter. Portware’s operations reduced
FactSet’s just completed fourth quarter operating margin by 110 basis points and was break-even to GAAP EPS. Excluding deal-related amortization, the Portware acquisition was $0.04 accretive to adjusted EPS in the fourth quarter of fiscal 2016.

●

The Company’s effective tax rate for the fourth quarter was 27.8%, as compared to 27.7% a year ago. Excluding income tax benefits from both periods, the current year annual effective tax rate was 28.3% compared to 30.3% in the prior year period.

●

Quarterly free cash flow was $57.0 million.

●

Client count rose by 17 and totaled 3,092 at August 31, 2016. This is net of a reduction of 41 clients due to the sale of the Market Metrics business.

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User count grew 2,120 to 65,655.

●

Annual client retention was greater than 95% of ASV. When expressed as a percentage of clients, annual retention was
94%, consistent with the prior year fourth quarter.

●

Employee count was 8,375 at August 31, 2016, up 1,015 people in the past 12 months. Excluding the acquired Portware workforce and employees of the sold Market Metrics business, headcount increased 13.4% from a year ago.

●

Capital expenditures were $13.1 million.

●

A regular quarterly dividend of $20.0 million, or $0.50 per share, was paid on September 20, 2016, to common stockholders of record as of August 31, 2016.

●

On July 1, 2016 FactSet entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $120.0 million of common stock. The Company received 595,607 shares of its common stock on that date, which was approximately 80% of the total number of shares of common stock expected to be repurchased under the ASR Agreement. The final settlement of the ASR Agreement is scheduled to occur in the first quarter of fiscal 2017.

●

FactSet repurchased 258,000 shares for $42.8 million during the quarter under the Company’s existing share repurchase program. As of August 31, 2016, $197.0 million remained authorized for further repurchases. Over the last 12 months, $431.0 million has been returned to stockholders in the form of share repurchases and dividends, funded by cash generated from operations and the sale of the Market Metrics business.

●

Common shares outstanding were 40.0 million at August 31, 2016.

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In July 2016, the Company announced it was strengthening its alliance with QUICK Corp. by bringing together FactSet’s in-depth insight and multi-asset class data and analytics with Japan-specific content such as Nikkei’s Flash News, Nikkei NEEDS Fundamentals and QUICK market information.

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FactSet was named the “Best Data Analytics Provider” of market data, research and analytics in the 2016 annual rankings announced by Waters Technology, a division of Incisive Media. FactSet was also honored with the “Best Research and Analytics Tool” award at the annual Systems in the City Awards presented in London by Goodacre UK, a leading securities industry consultancy.

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ASV rose to $1.15 billion, up 8.8% organically.

●

Revenues were $1.13 billion, an organic increase of 9.9%.

●

Diluted EPS, excluding the gain from the sale of the Market Metrics business, rose to $6.18.

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Free cash flow totaled $283.4 million, up $2.6 million from last year.

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Client count was up 116, while users grew by 3,450.

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FactSet returned $431.0 million to stockholders in the form of share repurchases and dividends, an increase of 33.5% over the prior year.

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The Company completed the strategic acquisition of Portware in October 2015.

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FactSet sold its Market Metrics business in July 2016 and recognized an after-tax gain of $81.7 million.

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FactSet was ranked #89 on Fortune’s “100 Best Companies to Work For,” marking the Company’s eighth appearance on the list in the last nine years.

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FactSet was recognized as one of the UK’s “Best Workplaces” by the Great Place to Work® Institute UK for the eighth consecutive year.

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In May 2016, FactSet was awarded “Best Overall Provider,” "Best Research Provider" and "Best Analytics Provider" by Inside Market Data.

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Revenues are expected to range between $286 million and $292 million.

●

GAAP operating margin is expected to range between 31.0% and 32.0%. Adjusted operating margin is expected to range between 32.5% and 33.5%.

●

The annual effective tax rate is expected to range between 28.0% and 29.0%.

●

GAAP diluted EPS is expected to range between $1.62 and $1.66. Adjusted EPS is expected to range between $1.68 and $1.72. The midpoint of the adjusted EPS range represents 14.5% growth over the prior year.

Three Months Ended

August 31,

Twelve Months Ended

August 31,

(In thousands, except per share data)

2016

2015

2016

2015

Revenues

Operating expenses

Cost of services

Selling, general and administrative

Total operating expenses

Operating income

Other income (expense)

Gain on sale of business

Interest (expense), net of interest income

Total other income

Income before income taxes

Provision for income taxes

Net income

Diluted earnings per common share

Diluted weighted average common shares

Three Months Ended

August 31,

Twelve Months Ended

August 31,

(In thousands)

2016

2015

2016

2015

Net income

Other comprehensive loss, net of tax

Net unrealized loss on cash flow hedges*

Foreign currency translation adjustments

Other comprehensive loss

Comprehensive income

(In thousands)

August 31,

2016

August 31,

2015

ASSETS

Cash and cash equivalents

Investments

Accounts receivable, net of reserves

Prepaid taxes

Deferred taxes

Prepaid expenses and other current assets

Total current assets

Property, equipment, and leasehold improvements, net

Goodwill

Intangible assets, net

Deferred taxes

Other assets

Total Assets

LIABILITIES

Accounts payable and accrued expenses

Accrued compensation

Deferred fees

Taxes payable

Deferred taxes

Dividends payable

Total current liabilities

Deferred taxes

Taxes payable

Long-term debt

Deferred rent and other non-current liabilities

Total Liabilities

STOCKHOLDERS’ EQUITY

Common stock

Additional paid-in capital

Treasury stock, at cost

Retained earnings

Accumulated other comprehensive loss

Total Stockholders’ Equity

Total Liabilities And Stockholders’ Equity

(In thousands)

Twelve Months Ended

August 31,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

Stock-based compensation expense

Gain on sale of business

Deferred income taxes

Loss (gain) on sale of assets

Tax benefits from share-based payment arrangements

Changes in assets and liabilities, net of effects of acquisitions

Accounts receivable, net of reserves

Accounts payable and accrued expenses

Accrued compensation

Deferred fees

Taxes payable, net of prepaid taxes

Prepaid expenses and other assets

Deferred rent and other non-current liabilities

Other working capital accounts, net

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of businesses, net of cash acquired

Proceeds from sale of business, net

Purchases of investments

Proceeds from sales of investments

Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend payments

Repurchase of common stock

Proceeds from debt

Debt issuance costs

Proceeds from employee stock plans

Tax benefits from share-based payment arrangements

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Three Months Ended

August 31,

(In thousands, except per share data)

2016

2015

Change

GAAP Operating income

Deal-related amortization (a)

Non-recurring items (b)

Adjusted operating income

%

Adjusted operating margin

GAAP Net income

Deal-related amortization (a)(d)

Non-recurring items (b)(d)

Gain on sale of business (c)

Income tax benefits (e)

Adjusted net income

%

Adjusted Diluted earnings per common share (f)

%

Weighted average common shares (Diluted)

(a)

GAAP operating income in the fourth quarter of fiscal 2016 was adjusted to exclude $3.7 million of pre-tax deal-related amortization, which reduced diluted earnings per share by $0.07. GAAP operating income in the fourth quarter of fiscal 2015 was adjusted to exclude $1.8 million of pre-tax deal-related amortization, which reduced diluted earnings per share by $0.03.

(b)

GAAP operating income in the fourth quarter of fiscal 2016 was adjusted to exclude $4.6 million of pre-tax non-recurring items related primarily to legal matters, which reduced net income by $3.3 million and diluted earnings per share by $0.08. GAAP operating income in the fourth quarter of fiscal 2015 was adjusted to exclude $3.0 million of pre-tax non-recurring items related primarily to the vesting of performance-based equity instruments. The vesting of performance-based equity instruments increased stock-based compensation, net of tax, by $2.1 million, and reduced diluted earnings per share by $0.05.

(c)

GAAP net income in the fourth quarter of fiscal 2016 was adjusted to exclude an after-tax gain of $81.7 million related to the sale of the Market Metrics business in July 2016, net of tax of $30.8 million. The gain on sale was taxed at an effective tax rate of 27.4% and increased diluted earnings per share by $2.01.

(d)

For the purposes of calculating adjusted net income and adjusted diluted earnings per share, deal-related amortization and non-recurring items were taxed at the effective tax rates of 28.3% for fiscal 2016 and 30.3% for fiscal 2015.

(e)

GAAP net income in the year ago fourth quarter was adjusted to exclude $2.3 million of income tax benefits related to finalizing prior year tax returns and other discrete items and GAAP diluted EPS was adjusted to exclude $0.05 from these same income tax benefits.

(f)

The sum of the non-GAAP diluted earnings per share may not equal the totals above due to rounding.

(Unaudited)

(In thousands, except per share data)

Q4’16

Q3’16

Q2’16

Q1’16

Q4’15

Q3’15

Q2‘15

Q1‘15

GAAP Operating income

Deal-related amortization

Non-recurring items

Adjusted operating income

Adjusted operating margin

GAAP Net income

Deal-related amortization

Non-recurring items

Adjusted net income

Adjusted Diluted earnings per common share

Weighted average common shares (Diluted)

Q4’16

Q3’16

Q2’16

Q1’16

Q4’15

% of ASV from buy-side clients

% of ASV from sell-side clients

ASV Growth rate from buy-side clients

ASV Growth rate from sell-side clients

Total Organic ASV Growth Rate

(In millions)

Q4’16

Q3’16

Q2’16

Q1’16

Q4’15

As reported ASV

Less acquired ASV (a)

Less Market Metrics ASV

Less Currency impact (b)

Organic ASV total

Total Organic ASV Growth Rate

(a)

Acquired ASV from acquisitions completed within the last 12 months.

(b)

The impact from foreign currency movements over the past 12 months was excluded above to calculate total organic ASV.